U.S. Stocks traded higher Wednesday as Wall Street celebrated better-than-expected earnings off of a record week of gains for the Dow.
The Dow Jones industrial average rose nearly a quarter of a percent, hitting a new intraday high, with Microsoft adding the most to gains. The S&P rose roughly 4 points as technology and health care led four sectors higher. Energy was the biggest laggard. The Nasdaq traded roughly 19 points higher.
"Investors are celebrating Microsoft and Morgan Stanley, which are part of the enthusiasm," said Jack Ablin, chief investment officer at BMO Private Bank.
Bank results continued to surprise Wednesday, with Morgan Stanley reporting earnings of 75 cents per share versus consensus expectations of 59 cents, according to Thomson Reuters. Morgan Stanley joined Goldman Sachs, Citigroup, JPMorgan Chase, and Bank of America on the list of U.S. financial institutions topping second-quarter profit forecasts.
"This suggests the big banks have been managing global uncertainty pretty well," Ablin said.
The Dow was led higher by Microsoft, which beat on earnings and revenue as its cloud product Azure saw revenue growth of 102 percent. The Dow Jones industrial average is tracking for a nine-day winning streak after closing at another record high Tuesday.
Sixty four percent of S&P 500 companies that had reported as of Tuesday morning topped earnings estimates, according to Thomson Reuters, compared to a long-term average of 63 percent over the past 22 years.
"Investors are playing the 'no-alternative' card, which means since earnings are not terribly disappointing, the rally continues," said Peter Cardillo, chief market economist at First Standard Financial.
The U.S. dollar is at a four-month high as Fed rate hike talk picks up and the U.S. economic data continues to strengthen.
U.S. housing starts rose more than expected in June, and Fed funds futures rates showed an uptick in rate hike expectations. According to the CME Group's FedWatch tool, the rates show investors see a roughly 40 percent chance the Fed will hike rates by its December meeting, compared with less than 20 percent a few weeks ago.
"I think it's a combination of data, and it's a safe haven because the geopolitical situation in Turkey certainly is not over," Cardillo said. "People are just being cautious."
Markets await an announcement in Turkey for emergency measures in the aftermath of a failed military coup.
Roughly 50,000 military officers, police, and other Turkish citizens were suspended from work or detained since the military coup in the country, which borders Syria and is a Western ally against Islamic State, Reuters reported.
Sterling moved higher after the Bank of England released its report on economic impact from last month's Brexit vote. It showed showed no clear evidence of slowing economic activity, with signs that demand for credit was easing and companies did not expect any near-term impact on capital spending, according to Reuters.
The pound traded near $1.32 against the dollar. China's yuan rose as the People's Bank of China strengthened its reference rate, which limits moves in the currency. The euro traded at $1.0979, and hit its lowest level against the dollar since June 27.
European stocks traded higher Wednesday after the BOE report. Shares of FTSE 250-listed Man Group tumbled on news that the hedge fund's chief executive will become CEO of Pacific Investment Management Co., Pimco in November.
The German DAX was up more than 1.5 percent. France's CAC traded nearly 1 percent higher, while the U.K.'s FTSE 100 was up 0.03 percent.
Oil inventories are due at 10:30 a.m. Wednesday. WTI crude futures fell near a session low of $43.69, the lowest level since May 10. Brent Crude traded near $46, down more than 1.5 percent.
Gold futures fell near a session low of $1,313, the lowest level since June 29. Wheat and corn futures were higher on reports of scorching heat in U.S.
Yields on U.S. sovereign bonds rose, with the 10-year yield at 1.58 percent. The U.S. 30-year note yielded 2.30 percent, and the U.S. 2-year note yielded 0.71 percent.
In deal news, Monsanto said Bayer's $64 billion bid was inadequate, amid speculation the U.S. seed giant will hold out for a $130 per share offer.
The Dow Jones Industrial Average traded near 18,577, up 0.10 percent, with Microsoft the biggest gainer and Disney the biggest laggard.
The S&P 500 was roughly 3 points higher, near 2,167. Information technology and health care were the only sectors in the green, while energy led eight S&P sectors lower. The Nasdaq rose more than 20 points, near 5,059.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 11.73.
Decliners narrowly led advancers on the New York Stock Exchange, with an exchange volume of 102.85 million and a composite volume of 354.35 million.
On tap this week:
*Planner subject to change.
Wednesday:
10:30 a.m. Oil Inventories
Earnings after the bell: American Express, eBay, Intel, Qualcomm, Core Labs, F5 Networks, Mattel, Newmont Mining, United Continental, Select Comfort, SLM (Sallie Mae)
Thursday:
8:30 a.m. Jobless Claims
8:30 a.m Philly Fed Business Outlook Survey
8:30 a.m Chicago Fed Nat'l Activity Index
9:00 a.m FHFA Home Price Index
10:00 a.m Existing Home Sales
10:00 a.m Leading Indicators
10:30 a.m. Natural Gas Inventories
4:30 p.m. Fed Balance Sheet
Earnings before the bell: Biogen, Daimler, General Motors, Roche Holdings, Travelers, Unilever, Union Pacific, Bank of NY Mellon, BB&T, Blackstone, Domino's Pizza, DR Horton, PulteGroup
Earnings after the bell: AT&T, Paypal, Schlumberger, Starbucks, Visa, Capital One, Chipotle Mexican Grill, E-Trade, Advanced Micro, Boston Beer, Pandora Media
Friday:
9:45 PMI Mfg Index Flash
1:00 p.m. Oil Rig Count
Earnings before the bell: BTB: General Electric, Honeywell, American Airlines, Moody's, Stanley Black & Decker.
By: Kate Rooney (CNBC).
Photo: Reuters.
Review: Emerging Market Formulations & Research Unit, FLAGSHIP RECORDS.
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