Techs lead market to another record
The Dow and Nasdaq finish the day higher, powered by IBM's better-than-expected earnings.
The tech-heavy Nasdaq Composite Index closed up, gaining 72.63 points to 2,561, pushed by climbing tech and Net stocks. The Dow Jones Industrial Average closed at another record high, jumping 145.76 points to 10, 727.
Shares of IBM surged by 13.3 percent, closing up 22.87 to 194.75.
Yesterday, the computer giant posted first-quarter earnings well ahead of Wall Street estimates. Net income reached $1.5 billion, or $1.55 a share. Analysts polled by First Call projected the company would earn $1.41 a share.
Revenue for the quarter rose 17 percent. As previously reported, excluding revenue from IBM's OEM component business, first-quarter revenue from the Americas totaled $8.8 billion, an increase of 13 percent compared with the first quarter of 1998. Revenues from Europe, the Middle East, and Africa were $6.3 billion, up 20 percent. Revenues from the Asia-Pacific increased 20 percent to $3.5 billion.
"Earnings reports have been pretty favorable across the board," said Timothy Stevenson, a money manager for First Capital Group. "It just looks like the market can go on [rising] for a long while.'"
Big Blue's positive earnings led other PC hardware stocks higher. Among the gainers, Apple rose 2 to 36.37, Dell gained 3.43, or 8.9 percent, to 41.87, and Gateway jumped 3.93 to 69.93. Hewlett-Packard, which traded stronger in the afternoon after opening on a weaker note, closed up 2 percent, gaining 1.5 to 76.61. However, Compaq remained in the red, down .56 to close at 23.68.
In the Internet sector, stocks ended their bullish run for the third day straight with big gains. Yahoo jumped 9.12 to close at 184, Infoseek rose 1.31 to 60.18, America Online gained 5.25 to 148, and Excite rose 3.62 to 140.62.
Earlier, communications-equipment maker Lucent also released positive earnings, beating Wall Street's expectations. The company said its second-quarter profits, excluding charges, more than doubled. Excluding charges, Lucent's profits were $457 million, or 17 cents a share. Analysts polled by First Call expected the company to make 15 cents.
Lucent said today that it's offloading a sales and services unit in an effort to reach more small- to midsize businesses. As previously reported, the unit will be sold to a group of private investors and will become the firm's largest indirect sales channel, the company said. Shares of Lucent jumped 4.4 percent, closing up 2.62 at 61.75.
Telecommunications company Bell Atlantic, which spent the trading day in the red, closed down .62 points at 57.87 after it posted earnings results that matched Street forecasts. The giant U.S. local phone company said first-quarter earnings rose 10 percent as the company's sales increased faster than its expenses. First-quarter profit, before charges, rose to $1.15 billion, or 73 cents a share, in line with what analysts surveyed by First Call expected.