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Overnight Markets: Earnings reports boost U.S. stocks

Shares gained as corporate profits from bellwethers Intel and Honeywell beat estimates and housing starts rose to the fastest rate in almost four years.

Overnight Markets: Earnings reports boost U.S. stocks

U.S. stocks extended rally on Wednesday, sending the S&P 500 to its highest level since early May, after corporate profits from bellwethers Intel and Honeywell beat estimates and housing starts rose to the fastest rate in almost four years.

The Dow Jones industrial average  gained 103 points, or 0.81%, to 12,909. The Standard & Poor's 500 Index rose nine points, or 0.67%, to 1,373. The Nasdaq Composite Index added 33 points, or 1.12%, to 2,943.

Technology shares had the biggest advance as Intel jumped 3.3% after posting profit that topped projections while scaling back its annual sales forecast.

Honeywell Inc was the top gainer on the S&P industrial sector with a 6.7% advance after its profits topped consensus views in what it called a "tough macroeconomic environment."

Data storage equipment maker EMC Corp jumped 9.4% after it replaced the head of its VMware Inc unit and reported a preliminary second-quarter profit. VMWare shares rose 12.1%.

Financials underperformed after Bank of America lost 4.9% after it posted a decline in revenue.

Vivus Inc shares surged 9.6% after regulators approved the company's weight-loss drug. Shares of Starbucks Corp fell as much as 2.7% after Cleveland Research Co said sales momentum for the coffee maker slowed in June.

On the negative side, shares of Rovi Corp plunged 43.3% after the digital media solutions provider slashed its profit forecast for the year and two brokerages downgraded its stock.

In economic news, housing starts rose 6.9% last month to a 760,000 annual pace after a revised 711,000 rate in May that was faster than initially estimated, the Commerce Department reported.

Federal Reserve Chairman Ben S. Bernanke reiterated during his second day of testimony to Congress that the U.S. fiscal situation is “unsustainable.” The central bank’s Biege Book survey showed the economy expanded at a “modest to moderate” pace in June and early July.

In Asia, shares gained on Thursday amid speculation China will take further measures to boost growth and after U.S. housing starts surged to the highest in four years.

The MSCI Asia Pacific Index gained 1.5% to 118 as of 12:56 p.m. in Tokyo. Japan’s Nikkei 225 Stock Average advanced 0.9%, while South Korea’s Kospi Index increased 1.7%, erasing yesterday’s loss. Australia’s S&P/ASX 200 Index climbed 1.3% and Singapore’s Straits Times Index rose 0.6%, headed for its 14th advance in 16 days. Hong Kong’s Hang Seng Index gained 1.7%, while China’s Shanghai Composite Index advanced 1.2%.

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