Strong earnings from Microsoft helped buoy spirits in the technology sector Wednesday as the Nasdaq composite roared up 100 points to 2,788.12, the composite's third-largest, single-day gain. The Dow shot up 187 points to close at 10,392.36.
With investors breathing a little easier following the tame September Consumer Price Index report, the market was able to focus on some outstanding earnings reports from leading tech bellwethers. Most analysts are expecting strong earnings from the likes of America Online and IBM to keep the rally alive.
"A nice pleasant surprise from AOL might carry us for a couple days," said Arthur Hogan, chief market analyst at Jefferies & Co.
More good news came Wednesday as the U.S. trade deficit shrank more than had been expected to $24.1 billion in August. It was the first time the trade deficit narrowed in four months in August as both imports and exports rose to records. August's trade deficit shrank a little less than the $24.7 billion deficit expected by economists.
Make no mistake. Microsoft Corp. (Nasdaq: MSFT) was the spark for the tech sector as its shares moved up 5 15/16 to 92 1/4 after topping Street estimates in its first quarter.
Oracle Corp. (ORCL) moved up 15/16 to 44 3/4 and Sun Microsystems Inc. (SUNW) rose 2 1/4 to 96 5/16.
Sprint posted third quarter earnings of 41 cents a share, just under First Call's expectation of 42 cents a share. The company also announced results for its money-losing but fast growing PCS division. Its shares closed up 1 1/8 to 64 15/16. AT&T Corp. (T) trimmed 1/8 to 43 7/8 and MCI WorldCom Inc. (WCOM) closed up 1 15/16 to 74 1/2.
Bell Atlantic (NYSE: BEL) fell 1/8 to 63 13/16 after it said strong growth in its data and wireless services and demand for features such as call waiting helped it post a 10 percent increase in third-quarter profits, meeting Wall Street expectations.
Intel Corp. (INTC) shot up 4 13/16 to 69 15/16. Advanced Micro Devices Inc. (AMD) gained 9/16 to 17 and International Business Machines Corp. (IBM) moved up 5 5/8 to 112 3/4 ahead of its earnings report.
Internet stocks were solid again as Yahoo! Inc. (YHOO) charged up 5 9/32 to 180 5/32 and Lycos Inc. (LCOS) tacked on 4 1/32 to 56 25/32. America Online Inc. (AOL) picked up 5 3/4 to 131 ahead of its first-quarter results. Amazon.com Inc. (AMZN) rose 3 7/8 to 80 1/2 and Infoseek Corp. (SEEK) inched up 7/8 to 29 7/16.
Merger couple MindSpring and EarthLink both posted better-than-expected earnings for the third quarter: MindSpring (Nasdaq: MSPG) shares closed off 7/8 to 25 13/16 and EarthLink (Nasdaq: ELNK) trimmed 1/16 to end at 41 11/16.
Among widely held PC stocks, Dell Computer Corp. (DELL) rose 1 1/2 to 40; Compaq Computer Corp. (CPQ) gained 1/2 to 20 7/16; Gateway Inc. (GTW) added 3 7/8 to 50 3/4 and Apple Computer Inc. (AAPL) roared up 6 5/8 to 75 1/8.
Juniper Networks Inc. (Nasdaq: JNPR) shot up 11 9/16 to 247 1/2 after it reported a smaller-than-expected third-quarter loss.