Strong results at Intel pull stocks sharply higher

NEW YORK -- The nation's big companies are giving investors a reason to restart Wall Street's spring rally.

Stocks surged Wednesday for the second time in three days, propelling all the major indexes up about 3% and the Dow Jones industrials up 257 points for their biggest one-day gain in nearly four months. An upbeat forecast from Intelt and the Federal Reserve's more positive take on the economy built on momentum that began Monday when an analyst issued an optimistic forecast for Goldman Sachs Group.

The news had investors believing again that the economy may not be as weak as many have feared. Wall Street had drifted lower over the past month, putting its big spring rally on hold as hopes for a quick recovery faded.

The latest encouragement came from Intel, the leading computer chipmaker whose much better results suggested that computer sales — and perhaps capital investment in general — is picking up faster than had been expected. Intel's news followed not just the upgrade of Goldman but the bank's strong profit report on Tuesday.

Meanwhile, the day's economic data were more reassuring than some of the numbers the market had seen recently. The Federal Reserve said industrial companies cut production far less in June than they had in previous months, with output at the nation's factories, mines and utilities slipping just 0.4% last month after sliding 1.2% in May.

Traders found more good news when the Fed released minutes from its June meeting, saying it now expects the economy to contract at a slower pace than previously thought.

"What we're seeing is some confirmation that stabilization is in fact upon us," said Matthew Kaufler, portfolio manager at Federated Clover Investment Advisors in Rochester, N.Y. "At least right now investors are willing to say it's not going to be as bad as feared."