Stocks surge on strong earns from Intel, JPMorgan

Oil prices jumped 84 cents to US$74.99 a barrel on the New York Mercantile Exchange, after earlier rising to as high as US$75.40. Gold prices retreated slightly after touching a fresh record high.

Bond prices fell as stocks soared. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.38 percent from 3.35 percent late Tuesday.

In other earnings news, the drugmaker Abbott Laboratories beat Wall Street's profit expectations and raised its projections for the year above current estimates. Abbott shares rose US$1.45, or 2.9 percent, to US$51.10.

Third-quarter earnings, and more specifically, the reports from major banks, are the market's key focus this week. Goldman Sachs Group Inc. and Citigroup Inc. will issue results on Thursday, followed by Bank of America Corp. on Friday.

Better-than-expected quarterly reports from banks have been the key driver of the market's seven-month-long rally, and financial stocks have been some of the biggest beneficiaries of that rally.

The benchmark Standard & Poor's 500 index is up 58.6 percent since hitting a 12-year low in early March. The KBW Bank Index, which tracks 24 of the largest U.S. banks, has risen a massive 143.3 percent since then.

With bank stocks having run up so much over the past several months, investors are worried that current valuations may exceed companies' earnings potential. Investors want to see signs that loan losses are stabilizing and that banks have been able to build up solid core businesses.

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