US STOCKS-S&P 500 hits record high with earnings, rate outlook in spotlight

James said investors are fighting off "negativity overhanging the market" due to concerns about the bank sector after New York Community Bancorp reported a surprise loss and cut its dividend last week. "Elevated anxiety levels become self-fulfilling," he said, which also pressures other regional banks "and selling begets selling." The KBW regional bank index was last up 0.2% after falling more than 2% earlier in the session.

Wall Street's major stock indexes rose on Wednesday, with the benchmark S&P 500 scaling a new record, as investors applauded a strong U.S. earnings season and monitored policymaker comments for clues on the interest rate outlook. Shares in Chipotle Mexican Grill jumped 9.6% after it topped analyst estimates for quarterly profit and sales late on Tuesday on strong demand for its burritos and rice bowls even as prices rose.

And Ford shares rose 5% as the automaker increased its first-quarter dividend and decided to scale back investments in new capacity for loss-making electric vehicles. With more than half of the S&P 500 companies having reported quarterly results, 81.2% surpassed profit expectations, according to LSEG data on Tuesday.

"The optimism around, for the most part, better earnings results, continues to carry the day and continues to keep the market in a positive bias," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. James said investors are fighting off "negativity overhanging the market" due to concerns about the bank sector after New York Community Bancorp reported a surprise loss and cut its dividend last week.

"Elevated anxiety levels become self-fulfilling," he said, which also pressures other regional banks "and selling begets selling." The KBW regional bank index was last up 0.2% after falling more than 2% earlier in the session. At 02:20 p.m. the Dow Jones Industrial Average rose 177.53 points, or 0.46% to 38,698 while the S&P 500 climbed 40.83 points, or 0.82 %, to 4,994.82 and the Nasdaq Composite gained 142.69 points, or 0.91 %, to trade at 15,750.44.

Among the 11 S&P 500 sectors, nine were advancing, led by a 1.4% gain in the consumer discretionary sector and a 1.2% increase in the tech sector. The weakest sector was consumer staples, which was down 0.1%. However, trading in New York Community Bancorp shares was volatile, with the stock last up 4.8% after sinking more than 13%. The bank, led by its newly appointed executive chairman Alessandro DiNello, vowed to cut its exposure in the troubled commercial real estate segment, where it suffered loan write-offs.

On Sunday Fed Chair Jerome Powell ruled out a March interest rate cut, and now traders were looking for fresh clues from other Fed officials. Minneapolis Fed President Neel Kashkari noted he expects two to three rate cuts this year for now, while Fed Governor Adriana Kugler said more assurance is needed before lowering rates.

Snap slumped 36% to a two-month low after it missed quarterly revenue estimates, as the Snapchat owner struggled to compete for advertising dollars. Uber forecast quarterly core profit and gross bookings above estimates. However, its shares were last up just 0.1% as it deferred announcements around capital allocation plans to its investor day on Feb. 14.

Fortinet shares were up 1% on the cybersecurity firm's fourth-quarter profit beat, while U.S.-listed shares of Alibaba Group lost 5.9% on downbeat quarterly revenue. VF Corp shares shed 10.5% after missing expectations for third-quarter results, with the Vans sneaker maker also announcing CFO Matt Puckett's exit this year. Enphase Energy surged 17.7% as the solar inverter maker expects inventory levels to normalize and demand for its products to pick up by the end of second quarter.

Advancing issues outnumbered decliners by a 1.3-to-1 ratio on the NYSE where there were 361 new highs and 66 new lows. On the Nasdaq 1,944 issues advanced and 2,231 declined with decliners outnumbering advancers by a 1.1-to-1 ratio.

The S&P 500 posted 75 new 52-week highs and 2 new lows while the Nasdaq recorded 195 new highs and 128 new lows.