NEW YORK (Reuters) – Stocks rose on Wednesday as stronger-than-expected earnings and upbeat data from China helped fuel optimism about a recovery.

The rally marked the fourth day of gains for the S&P 500, which is up 12.5 percent since September 1, and underscored the view that the majority of quarterly results will once again top Wall Street's expectations.

S&P 500 companies' earnings are expected to rise 23.6 percent from a year ago, which would represent a fourth straight quarter of year-over-year earnings increases, according to Thomson Reuters data.

Railroad operator CSX Corp (CSX.N) jumped 4.6 percent to $59.89 after it reported stronger-than-expected quarterly profits late Tuesday.

JPMorgan Chase and Co (JPM.N) Intel Corp (INTC.O) also reported above-estimated earnings, but their shares edged lower after rallying in recent weeks. JPMorgan Chase slipped 1.2 percent to $39.91. Intel shed 1.8 percent to $19.41, a day after the dominant chipmaker also gave an upbeat forecast for fourth-quarter sales and margins.

"Earnings reports to date appear to be justifying the recent rally, and I think that's allowing people to feel like they're getting good value by continuing to buy stocks," said Michael Cuggino, president of Permanent Portfolio Funds in San Francisco.

Business confidence in China rose and the trade surplus narrowed in China, the world's No. 2 economy, data showed, helping industrial shares. Caterpillar Inc (CAT.N) was up 2.1 percent at $81.01, and the S&P capital goods index (.GSPIC) added 1.6 percent.

Further boosting sentiment, the U.S. central bank may once again flood markets with cheap cash to boost growth, according to minutes from the Federal Reserve's latest meeting.

The Dow Jones industrial average (.DJI) was up 119.47 points, or 1.08 percent, at 11,139.87. The Standard & Poor's 500 Index (.SPX) was up 13.03 points, or 1.11 percent, at 1,182.80. The Nasdaq Composite Index (.IXIC) was up 30.60 points, or 1.27 percent, at 2,448.52.

The dollar index (.DXY) shed 0.4 percent and reflected the recent inverse correlation between the dollar and equities. A decline in the greenback has helped trigger a move into equities.

Earnings as well as the low bond yields could also propel a move to riskier assets, Cuggino said.

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"One thing we've seen in this economic recovery is that while we still have a lot of labor issues, corporate profits have held up really well," Cuggino said.

Based on their recent history, top S&P 500 companies have a high probability of beating expectations, according to data from Birinyi Associates in Westport, Connecticut, which compiled data on results from the last five years.

Although the earnings period has just begun, results from 81 percent of S&P 500 companies have surpassed expectations. The long-term average for beats for an entire reporting period is 61 percent, Thomson Reuters data showed.

(Reporting by Caroline Valetkevitch; Editing by Jan Paschal)
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