* Ford rallies after results; AT&T, Dow Chemical lower
* Fewer companies than usual beat revenue expectations
* Federal Reserve seen keeping stimulus for several months
* Indexes up: Dow 0.5 pct, S&P 0.2 pct, Nasdaq 0.5 pct
By Ryan Vlastelica
NEW YORK, Oct 24 (Reuters) - U.S. stocks edged higher onThursday, continuing the market's recent upward trend asexpectations for steady accommodative monetary policy for theforeseeable future offset a mixed batch of earnings and economicdata.
The S&P 500 is on track for its tenth gain in the past 12sessions, a rally largely driven by expectations the U.S.Federal Reserve will continue its stimulus, which has propped upthe equity market and economy for much of the year. The S&Pclosed at a record on Tuesday.
The prospect of continuing easy money was enough to offsetan earnings season marked by some weak outlooks and tepidrevenue growth. Dow Chemical Co, Xerox Corp andAT&T Inc all fell following results on Wednesday, thoughFord Motor Co was a bright spot.
"Earnings haven't been a best-case or worst-case scenario,but it doesn't look like the economy is firing on allcylinders," said John Norris, managing director of wealthmanagement with Oakworth Capital Bank in Birmingham, Alabama.
"Still, while the gains we've seen might be illusory, giventhe Fed, there's no reason to think we're on the cusp of apullback so long as the Fed stays put."
In another sign the economy wasn't "firing on allcylinders," initial claims for state unemployment benefits fellless than expected in the latest week. The preliminary read ofMarkit's Manufacturing Purchasing Managers Index grew at itsslowest pace in a year this month and factory output contractedfor the first time since late 2009.
The Dow Jones industrial average was up 81.36 points,or 0.53 percent, at 15,494.69. The Standard & Poor's 500 Index was up 4.06 points, or 0.23 percent, at 1,750.44. TheNasdaq Composite Index was up 18.80 points, or 0.48percent, at 3,925.88.
The S&P has risen about 1.5 percent since Washingtonpoliticians ended a stalemate to avoid a debt default and end apartial government shutdown, culminating in a record high onTuesday, but the damage to the economy has led investors toexpect the Fed to delay scaling back its stimulus for severalmonths.
Ford rose 1.9 percent to $17.86 after the automaker boostedits full-year global earnings and margin outlook, helped by animproved forecast in Europe and better-than-expected results inthe third quarter. Dow component 3M Co rose 0.5 percentto $123.85 after posting a 5.6 percent rise in revenue.
PulteGroup Inc was the S&P's biggest gainer, jumping7.1 percent to $17.86 after the homebuilder reported results andsaid a slowdown in new home orders would be "short-lived." Itlifted other names in the sector, with D.R. Horton Inc up 3.4 percent to $20.13 and Beazer Homes Inc up 2.2percent to $19.56.
On the downside, both AT&T and Dow Chemical fell afterresults missed expectations. AT&T, a Dow component, fell 1.4percent to $34.80 while Dow Chemical lost 2.3 percent to $40.08after. Xerox slumped 8.3 percent to $9.84 after giving a weakoutlook.
Cameron International Corp was the S&P's biggestpercentage decliner, slumping 13 percent to $54.92. Its adjustedearnings came in sharply below expectations.
With 41 percent of S&P 500 companies having reported, 67.6percent have topped analyst expectations, according to ThomsonReuters data, a rate that is above the historical average of 63percent. However, only 52.7 percent have topped revenueexpectations, below the long-term average of 61 percent.
Visa Inc rose 1.6 percent to $202.03 as the top boostto the Dow after the credit card payment processor boosted itsannual dividend.
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