Strong results from Google, IBM lift tech stocks

(AP) Strong results from Google, IBM lift tech stocks
By MATTHEW CRAFT
AP Business Writer
NEW YORK
Strong earnings from tech giants are nudging the stock market higher Wednesday. Investors also drew encouragement from a vote by the House of Representatives to let the government keep paying all its bills for another four months.

Tech giants Google and IBM reported surprisingly solid fourth-quarter earnings late Tuesday, a hopeful sign for investors who expected tech companies to struggle at the end of last year.

As of 1:55 p.m., the Dow Jones industrial average was up 71 points to 13,783, putting it on track to close at its highest level since October 31, 2007. IBM led the Dow’s 30 stocks, surging 5 percent. Without the jump in IBM, the Dow would be flat.

The House passed a bill Wednesday afternoon to suspend the government’s borrowing limit until May 19. The Senate’s Majority Leader Harry Reid, D-Nev., said his chamber would immediately move the legislation to the White House.

The Standard & Poor’s 500 index was up one point at 1,493, while the tech-heavy Nasdaq composite rose 11 points to 3,154.

The quarterly earnings season is off to strong start. Of the 83 companies in the S&P 500 that reported through Tuesday, 54 of them have beaten Wall Street’s estimates, according to S&P Capital IQ.

The stock market has climbed so quickly this month that it will likely take more than good earnings to keep it heading higher. “This market is really stretched,” said Clark Yingst, chief market analyst at the securities firm Joseph Gunnar. “We’ve essentially gone straight up since January 2. There’s certainly room for people to take profits.”

The S&P 500 index is already up 4.7 percent in 2013. That’s roughly half of what most stock-fund investors hope to make in a single year.

IBM’s results beat expectations, thanks to its lucrative Internet-based “cloud” computing business and other software services. IBM also raised its earnings outlook for the current year. Its stock rose $10.12 to $206.19.

Google jumped 6 percent after its earnings climbed at the end of last year as online advertisers spent more money in pursuit of holiday shoppers. Google rose $44.63 to $747.60.

Another tech giant, Apple, is scheduled to report after the close of trading.

Advanced Micro Devices also posted results that were better than analysts had expected. The world’s second-largest maker of microchips, behind Intel, posted a smaller loss and higher revenue than analysts had forecast. AMD jumped 9 percent, making it the top stock in the S&P 500. It rose 22 cents to $2.65.

Coach plunged 16 percent, or $9.53, to $51.15 after the luxury handbag maker said a challenging economy and heavy price-cutting by competitors weighed on its results. Rivals like Michael Kors have attracted more followers.

In the bond market, the yield on the benchmark 10-year Treasury note dipped to 1.83 percent, down from 1.84 percent late Tuesday.