Stocks surged late in the day and ended higher on Wednesday, as better-than-expected earnings prompted investors to buy beaten-down shares.

The Dow Jones Industrial Average was up 61.56 points, or 0.6 percent, to 10,617.78 after trading as low as 10,499 earlier. The Nasdaq Composite Index rose 12.91 points, or 0.6 percent, to 2,092.53, well above its 2,066 intraday low. The S & P; 500 Index was up 4.71 points, or 0.4 percent, to 1,187.70.

Among local companies, it was a day of both upgrades and downgrades. DreamWorks Animation SKG Inc. soared 9 percent to $37, after its stock rating was upgraded from “neutral” to “buy” by Fulcrum Global Partners.

L.A.-based California Pizza Kitchen Inc. gained 1.4 percent to $24.06 after its rating was lifted to “outperform” from “market perform” by Raymond James.

And in similar fashion, Beverly Hills-based Hilton Hotels Corp. rose a slight 0.6 percent to $22.54 after coverage of its stock was initiated by Bear Stearns & Co., set at “outperform.”

On the down side, Image Entertainment Inc. dropped 10.5 percent to $5.99 on the same day the Chatsworth-based entertainment distribution company said it expects to swing to a third-quarter profit from continuing operations on a 45 percent revenue jump, and increased its fiscal 2005 outlook.

And shares of DaVita Inc. fell 0.7 percent to $41.40 after the El Segundo-based dialysis services company’s rating was cut to “buy” from “strong buy” by Matrix USA.