US STOCKS-Wall Street gains on optimism over fiscal deal

* U.S. lawmakers begin last-ditch effort on debt ceiling

* About 6.6 percent of S&P 500 companies to report results

* Bank of America (Other OTC: BACYL - news) posts profit, credit loss provisions dip

* Indexes: Dow up 0.5 pct; S&P up 0.6 pct; Nasdaq up 0.6 pct

By Angela Moon

NEW YORK, Oct (KOSDAQ: 039200.KQ - news) 16 (Reuters) - U.S. stocks rose on Wednesday
amid cautious optimism that U.S. politicians would strike a
last-minute deal to prevent the country from defaulting on its
debt, an event that could roil markets and economies worldwide.

Among early gainers, shares of Yahoo (NasdaqGS: YHOO - news) rose 1.7
percent to $34.00, a day after the company reported
third-quarter earnings that were slightly above forecasts by
analysts.

Bank of America Corp reported a third-quarter profit
of $2.22 billion, compared with a loss a year earlier, as
provisions for credit losses fell. Shares were up 1.9 percent at
$14.51.

In Washington, the U.S. Senate prepared for a last-ditch
effort to avoid a historic lapse in the government's borrowing
authority, a breach that President Barack Obama has said could
lead to default and deliver a damaging blow to the global
economy. Senators are scheduled to return at noon
(1600 GMT).

"We are seeing pretty heavy buying in early trade and we've
gotten back what we lost yesterday already. There is optimism
that there will be a deal in the very end," said Ryan Detrick,
senior technical strategist at Schaeffer's Investment Research
in Cincinnati, Ohio.

The Dow Jones industrial average rose 79.25 points,
or 0.52 percent, to 15,247.26, the S&P 500 gained 10.13
points, or 0.6 percent, to 1,708.19 and the Nasdaq Composite
added 23.06 points, or 0.61 percent, to 3,817.071.

The gains come after markets were rattled by a warning from
Fitch Ratings late Tuesday that it could cut the sovereign
credit rating of the U.S. from AAA, citing political
brinkmanship over raising the federal debt ceiling.

The corporate earnings season has gotten off to a good start
as a majority of companies has met or beat estimates, with an
average surprise of 4.7 percent so far, said Jonathan Golub,
chief U.S. market strategist at RBC Capital Markets in New York.

He said 40 companies representing 12 percent of the S&P
500's market capitalization have reported so far in the season.

Over the course of the day, 22 companies representing 6.6
percent of the S&P 500 index will report results, including IBM
, American Express and eBay after the
close of the market.

"As expected, cyclical sectors have delivered better
relative results than less economically sensitive names, with
financials, industrials, discretionary, materials and technology
all posting positive surprises," Golub said.

Stanley Black & Decker Inc (NYSE: SWJ - news) shares were down 14
percent at $76.84 after the tool-maker cut its guidance for the
year amid weakening emerging markets and an expected hit from
the U.S. government shutdown.

BlackRock Inc (NYSE: BLK - news) , the world's largest money manager,
said its third-quarter profit grew 15 percent amid strong global
demand from its retail and institutional clients. The stock was
up 2.1 percent at $288.11.

Source: http://news.yahoo.com/us-stocks-wall-street-gains-141653727.html
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