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By Jessica DiNapoli
NEW YORK (Reuters) - Markets continued their upward march on Wednesday and yields climbed due partly to positive corporate earnings, despite apprehension about the Delta coronavirus variant and inflation, which spurred a flight to safety earlier in the week.
Wall Street extended gains after ending Tuesday sharply higher when it snapped a several-day losing streak. Yields on U.S. treasuries rose as markets regained a sense of calm.
Positive earnings from major companies, including Verizon Communications Inc, Coca-Cola Co United Airlines and Chipotle Mexican Grill, helped fuel the gains.
“There’s a lot of nice follow-through from yesterday. On Monday there was a growth scare, and on Tuesday we recovered from that. Investors realized it was an over-reaction,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.
“Today is a continuation from yesterday showing that although global growth may be impacted in the short run, we ultimately are still on a recovery path, and it makes sense to stay long the market."
By mid-afternoon, the Dow Jones Industrial Average rose 259.9 points, or 0.75%, to 34,771.89, the S&P 500 gained 29.45 points, or 0.68%, to 4,352.51 and the Nasdaq Composite added 93.29 points, or 0.64%, to 14,592.17.
The yield on benchmark U.S. Treasuries rebounded for a second day on Wednesday, with 10-year Treasury notes up 7.9 basis points to 1.288%, after briefly crossing above 1.3%. Demand at an sale of 20-year government debt was tepid as investors preferred riskier assets.
"I think the big issue out there that we see from investors is where else can I go to make money except the stock market," said Gary Bradshaw, portfolio manager at Hodges Capital Management in Dallas.
"With a very accommodating Fed, saying they’re not going to raise rates out until 2022 or longer, the market should continue to do well," Bradshaw said.
Stocks could receive a further uplift later Wednesday if U.S. President Joe Biden's $1.2 trillion bipartisan infrastructure bill can navigate a planned procedural vote despite Republican appeals for delay. A vote was scheduled for mid afternoon.
A European Central Bank meeting on Thursday is expected to strike a dovish tone and provide a further boost.
The safe-haven dollar on Wednesday retreated from more than three-month highs, but inflation fears and concerns about the highly contagious coronavirus variant kept investors cautious.
Another safe haven, the Japanese yen, was also down against the dollar, as risk aversion eased.