US stocks close higher for third day in a row

Investors drove stock prices to their highest level in a week Wednesday, encouraged by a crop of corporate earnings and reassuring U.S. and Chinese economic data.

Major U.S. stock indexes notched their third day of gains in a row. Yahoo and Delta Air Lines were among the companies posting big gains. The gains were broad; for every stock that declined, nearly four rose.

The market is coming back from a steep drop at the end of last week led by Internet and biotechnology stocks. That move away from some of the riskier, high-priced stocks that drove down the market is nearly, if not completely done now, said Jim Russell, senior equity strategist at U.S. Bank Wealth Management.

Stocks started climbing from the opening bell on Wednesday as investors cheered the latest quarterly earnings report from Yahoo. The Web pioneer reported late Tuesday that it is making most of its money from its stakes in two Asian Internet companies: China's Alibaba Group and Yahoo Japan.

The market also welcomed a Chinese government report showing that the world's second-largest economy grew 7.4 percent from a year earlier in the January-March quarter. A favorable report on U.S. factory production helped keep investors in a buying mood.

Unlike Monday and Tuesday, the rally didn't falter during the day. Instead, the buying gained momentum in the afternoon after the Federal Reserve said its latest survey showed economic growth picking up across most of the U.S. over the past two months as bitter winter weather subsided.

All told, the Standard & Poor's 500 index rose 19.33 points, or 1.1 percent, to 1,862.31. All ten industry sectors in the S&P 500 increased, led by industrial stocks, including several airlines and transportation companies.

The Dow Jones industrial average added 162.29 points, or 1 percent, to 16,424.85. The Nasdaq composite rose 52.06 points, or 1.3 percent, to 4,086.22.

The three major stock indexes are each up for the week, but remain down for the month after several days of choppy trading. The three-day rise in stock prices helped push the S&P 500 index up 0.8 percent so far this year.