Disney Result Helps US Markets Close Higher

US stocks climbed on Wednesday on the heels of a surprise quarterly profit from Disney and as investors stayed optimistic that a deal was near for a US coronavirus fiscal aid package.

Walt Disney Co's shares jumped, to put it among the biggest boosts to the S&P 500 and Dow. The stock notched its biggest daily percentage gain since March 24 as revenue declines for Disney parks and media networks were not as bad as feared.

"That is helping the Dow and that has been a laggard versus the S&P this year, but it is more than that," said Willie Delwiche, investment strategist at Baird in Milwaukee. "At a time when everyone is talking about how big and how important these megacaps are to the S&P, kind of quietly you are starting to see a little bit of a leadership rotation."

The Dow Jones Industrial Average rose 1.39 percent to 27,201, the S&P 500 gained 0.6 percent to 3,327 and the Nasdaq Composite added 0.5 percent to 10,998.

Square surged after the payments processor reported a 64 percent rise in second-quarter revenue, as consumers increased online buying and used its peer-to-peer Cash App platform during the pandemic.

As quarterly results have come in better-than-feared and heavyweight technology and technology-related companies have surged, a heavy dose of fiscal and monetary stimulus have helped fuel a rally in equities to bring the S&P 500 to less than 2 percent from its closing record on February 19.

With 384 companies in the S&P having reported earnings through Wednesday morning, results are coming in 23.5 percent above expectations, in aggregate, according to Refinitiv data, the highest on record back to 1994.

Economic data painted a mixed picture, as US services industry activity gained momentum in July, according to an ISM survey, with new orders jumping to a record high. However, hiring declined, supporting views that a recovery in the labor market was faltering.

Earlier, the ADP National Employment Report, which can be an inconsistent precursor to the government payrolls report set for Friday, showed US private employers hired far fewer workers than expected last month.

"We know we had this tremendous rebound off the lows but what we need now is sustained strength," said Delwiche.

US Congressional Democrats and White House officials were set to resume negotiations on coronavirus relief legislation on Wednesday, with administration officials aiming for an agreement by Friday.

Financials, industrials and materials , that track economic growth, outperformed among the major S&P sectors. (Reuters)