Yahoo leads US stocks higher on strong earnings US stocks returned to positive territory on Wednesday led by shares in Yahoo, as the earnings season continued to drive trading. The tech company's shares rose sharply following the release of the company's earnings report after market close on Tuesday. Shares were up 6.8 per cent to $28.70 after beating earnings per share estimates. Investors were also treated to a newscast-style livestream that featured Marissa Mayer, chief executive, discussing Yahoo's business. The company did, however, report a fall in display advertising revenue and gave third-quarter guidance below forecasts. Yahoo's rise helped the S&P 500 to add 0.4 per cent, erasing losses of the day before and putting the index back in near record territory. Trading at 1,682.37, the benchmark index was about 4 points away from intraday highs. Stocks were helped by comments from Federal Reserve chairman Ben Bernanke, who echoed earlier sentiments that the end of quantitative easing was dependent on an improving US economy. The Nasdaq added 0.3 per cent to 3,608.15, and the Dow Jones Industrial Index gained 0.1 per cent to 15,468.85. Mr Bernanke's testimony to the House Financial Services Committee on Wednesday echoed earlier sentiments that the Fed has an end in sight for QE, but is in no rush to execute it. I think it points out that the Fed is going to be data dependent going forward. I think [Bernanke] is going to be providing a lot of assurances to investors that the Fed is not going to pull the punch bowl away too soon and basically they will be as flexible as needed based on what the economic conditions are," said Cam Albright, director of asset allocation, Wilmington Trust Investment Advisors. The lack of news from Mr Bernanke put earnings in focus. Bank of America was the latest US bank to beat expectations, with the recent stock rally helping to double profits in its trading division. Shares were up 2.1 per cent to $14.21, and are now up more than 22 per cent on the year to date. With 10 per cent of companies on the S&P 500 having reported second-quarter earnings, 85 per cent have met or beaten analyst expectations, according to data from Thomson Reuters. That is better than the past four quarters, in which 77 per cent of companies have met or beaten forecasts. However, earnings were not kind to all. Regional lender PNC Financial also reported earnings that beat expectations, but shares fell 1.1 per cent to $73.65. However, shares in the company are up 18.7 per cent in the past six months. US Bancorp missed expectations in its earnings report as revenue fell, sending shares down 1.6 per cent to $36.68. Toymaker Mattel, known best for its iconic Barbie dolls, fell 5.6 per cent to $43.75 after releasing disappointing second-quarter results. The company is up nearly 16 per cent in the past six months. American Express is expected to report after the bell on Wednesday, but shares fell 4.3 per cent to $74.90 on news of an EU plan to cap fees on all consumer debit and credit card transactions. Homebuilders rose on data that single-family homebuilding barely fell, although construction of apartments fell sharply. DR Horton rose 1.7 per cent to $22.07, PulteGroup added 1.6 per cent to $19.58, and KB Home gained 5.6 per cent to $19.96. Construction equipment manufacturer Caterpillar fell sharply after hedge fund manager Jim Chanos said at a conference that he has taken a short position on the company because of a slowdown in China and commodities prices. The company's shares were off 1.7 per cent to $86.65