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S&P, Nasdaq rise on bank and tech gains; IBM dents Dow

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[BENGALURU] The S&P 500 and the Nasdaq rose on Wednesday, aided by banks and technology stocks, while a drop in IBM weighed on the Dow.

The gain in financials was underpinned by a 3 per cent jump in shares of Morgan Stanley, which reported a surge in quarterly profit.

Morgan Stanley's solid results provided some succor to investors stung by weak results at chief rival Goldman Sachs a day earlier.

Shares of Bank of America, JPMorgan and Wells Fargo edged up slightly. "This bounce today in US equities is perhaps investors looking beyond daily moves," said James Athey, senior investment manager at Aberdeen Asset Management. "While there has been some disappointment, the big picture has not vastly changed. We're still talking about a global economy which is doing better... and central banks that are looking to normalize, and all of that should be supportive for risk assets." Shares of IBM sank 5 per cent to US$161.75 after the company reported a bigger-than-expected decline in revenue for the first time in five quarters. The stock was the biggest drag on the Dow and the S&P.

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At 9:44 a.m. ET (1344 GMT), the Dow Jones Industrial Average was down 12 points, or 0.06 per cent, at 20,511.28, the S&P 500 was up 6.37 points, or 0.27 per cent, at 2,348.56 and the Nasdaq Composite index was up 28.40 points, or 0.49 per cent, at 5,877.87.

With Wall Street near record levels and worries over President Donald Trump's ability to carry out his pro-growth promises, investors are hoping first-quarter earnings will justify pricey market valuations.

So far, the results have been promising. Of the 45 S&P 500 companies that have released results, nearly 76 per cent have topped earnings estimates, according to Thomson Reuters I/B/E/S.

Overall profits of S&P 500 companies are estimated to have risen 10.7 per cent in the quarter - the best since 2011.

Eight of the 11 major S&P 500 sectors were higher.

Utilities, real estate and consumer staples, which have risen in the past few days, were down.

Facebook was up 1 per cent and provided the biggest boost to the S&P and the Nasdaq.

Intuitive Surgical was up 6.4 per cent at US$806.58 after the company reported higher-than-expected first-quarter revenue and profit.

American Express, eBay and Qualcomm are scheduled to report results after the market closes.

In economic data, the Federal Reserve's Beige Book, which will give a glimpse into economic conditions across the United States, is due at 2:00 pm ET (1800 GMT).

Advancing issues outnumbered decliners on the NYSE by 1,792 to 760. On the Nasdaq, 1,680 issues rose and 605 fell.

The S&P 500 index showed 13 52-week highs and one low, while the Nasdaq recorded 33 highs and nine lows.