Microsoft propels Wall Street to new record highs

By Lewis Krauskopf

(Reuters) - Wall Street gained on Wednesday, sending the S&P 500 and Dow industrials to fresh records, as Microsoft's strong results boosted the indexes and marked the latest sign that U.S. corporate earnings season may be less dour than feared.

Microsoft shares surged 6.3 percent after the software giant posted sharp growth in its cloud computing business.

The stock was by far the biggest lift to the major indexes and the tech sector <.SPLRCT>.

Defensive sectors such as utilities and telecom have led the market's gains in 2016, while groups such as financials and tech have trailed.

"It seems like the weaker parts of the market are starting to at least try and keep pace with the stronger parts and there really hasn't been a big selloff in the big winners to this point," said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

The Dow Jones industrial average rose 45.09 points, or 0.24 percent, to 18,604.1, putting it on pace for its ninth straight day of gains.

The S&P 500 gained 10.27 points, or 0.47 percent, to 2,174.05 and the Nasdaq Composite added 56.85 points, or 1.13 percent, to 5,093.22.

Tech led seven of the 10 major S&P sectors higher, with the defensive sectors - telecoms <.SPLRCL>, utilities <.SPLRCU> and consumer staples <.SPLRCS> - down 0.1 percent to 0.5 percent.

Second-quarter earnings for S&P 500 companies, which began reporting in earnest this week, are now expected to fall by 3.8 percent, less than the 4.5 percent decline estimated earlier in the week, according to Thomson Reuters I/B/E/S.

"The market has been rallying on the expectation of good earnings with some companies even providing decent forecasts," said Thomas Wilson, managing director of wealth advisory at Brinker Capital.

In other quarterly reports, Morgan Stanley was up 2.4 percent after its profit topped analysts' estimates, rounding off upbeat results from the six biggest Wall Street banks.

Abbott Laboratories reported better-than-expected quarterly sales and profit, sending its shares up 2.2 percent.

One of the notable drags on the market was Disney , down 1 percent after Stifel downgraded the stock.

Intel , eBay and American Express are scheduled to report results after the bell.

Advancing issues outnumbered declining ones on the NYSE by a 2.29-to-1 ratio; on Nasdaq, a 2.42-to-1 ratio favoured advancers.

The S&P 500 posted 45 new 52-week highs and no new lows; the Nasdaq Composite recorded 99 new highs and 16 new lows.

(Additional reporting by Tanya Agrawal and Anya George Tharakan; Editing by Savio D'Souza and Nick Zieminski)