Stocks rise as optimism builds about earnings

NEW YORK (AP) — The Dow Jones industrial average closed above 10,700 for the first time in 15 months on Thursday as investors bet that stronger results would revive a disappointing start to the corporate earnings season.

The stock market’s advance was uneven, with technology stocks rising ahead of quarterly earnings from chip maker Intel Corp. and financials climbing before a profit report from JPMorgan Chase & Co. due today. Safe havens such as utilities and consumer-staples stocks fell.

The Dow industrials rose 30 points, and broader indexes posted bigger advances.

The gains came after SAP, a major business software maker based in Germany, said its fourth-quarter revenue fell less than forecast. That provided some reassurance that companies are becoming more willing to invest in technology. Investors are also watching closely to see whether companies can bolster their earnings with solid revenues instead of just continuing to cut costs.

Anticipation that corporate earnings reports would turn around after a weak showing by aluminum maker Alcoa Inc. on Monday helped investors look past a mixed bag of economic news. Intel’s revenue and earnings came in far ahead of analysts’ expectations after the closing bell.

The government said businesses increased their inventories by a larger-than-expected amount in November. The gain is a welcome sign for the economy and suggests that businesses are feeling more confident that sales will pick up. It was the second straight month that stockpiles rose after 13 months of declines.

The positive news on inventories helped offset weaker reports on retail sales and initial unemployment claims.

The Commerce Department said business inventories rose by 0.4 percent in November, double the increase economists expected. Earlier, it said retail sales fell 0.3 percent in December. Economists polled by Thomson Reuters had been expected an increase.