S&P has best 3 days since March on earnings optimism

By Leah Schnurr

NEW YORK (Reuters) - U.S. stocks jumped on Wednesday with the S&P 500 racking up its three best days since March, sparked by results from bellwether Intel Corp (INTC.O) that lifted hopes for a rebound in technology spending and improved corporate profitability.

The broad S&P 500 has gained 6.1 percent so far this week as companies, including Intel and Goldman Sachs Group (GS.N), posted much better-than-expected results. It is the biggest three-day gain since the three major U.S. stock indexes began a rebound from 12-year lows in early March.

The current earnings season is key as investors look for evidence to support optimism for an economic recovery.

In a sign that consumers might be faring better than feared, U.S. credit card companies said defaults and delinquencies were lower in June than expected. American Express (AXP.N) forecast better business in the second half of the year, pushing its stock up 11.3 percent to $27.22.

Optimism was further reinforced by manufacturing data that suggested the recession is abating, as well as minutes from the Federal Reserve's most recent policy-setting meeting that showed officials judged that the U.S. economy's contraction was slowing.

But Intel set the tone with earnings that handily beat forecasts on better-than-expected consumer demand for personal computers. It also gave a strong outlook and shares of the world's largest chip maker shot up 7.3 percent to $18.05.

"Intel is the guts of the whole technology industry, so when they're talking about consumers getting more active on the PC front, that augurs well for a lot of different things," said David Katz, chief investment officer at Matrix Asset Advisors in New York.

The Dow Jones industrial average .DJI rose 256.72 points, or 3.07 percent, to 8,616.21. The Standard & Poor's 500 Index .SPX gained 26.84 points, or 2.96 percent, to 932.68, its best gain in nearly two months and putting it solidly back into the black for the year. The Nasdaq Composite Index .IXIC jumped 63.17 points, or 3.51 percent, to 1,862.90.