This time last week, Wall Street was consumed with rising inflation and paid little attention to generally strong corporate earnings. Now, thanks to IBM, everyone's worried about Y2K spending and interest rates have been moved to the back burner.
Such is the nature of the market.
Despite a somewhat disappointing third-quarter earnings report from IBM, technology stocks managed to gain ground in heavy trading this week.
The Nasdaq composite closed up 85 points to 2,816.83 for the week while the Dow Jones industrial average shot up 450 points to 10,470.25.
"I guess what you've got is a lot of traders getting flat before the weekend. They were coming up short, they probably were a little scared this week,'' Doug Myers, vice president of equity trading at Wachovia Securities.
America Online Inc. (NYSE: AOL) gave Internet fans the news they'd hoped for as the world's largest online service provider hurdled analysts' estimates in its first quarter.
AOL pocketed $184 million, or 15 cents a share, on sales of $1.5 billion. More important, it grew its advertising sales in the quarter to more than $350 million and exited the quarter with a $2 billion backlog in ad orders.
Microsoft Corp. (Nasdaq: MSFT) also did its job, posting a profit of $2.19 billion, or 38 cents a share, on sales of $5.38 billion.
That beat Street estimates by 4 cents a share.
Microsoft officials also said they expect "strong" PC demand through the next quarter.
Looking ahead to this week's earnings reports, investors will be paying close attention to a bevy of Internet companies as well as struggling PC maker Compaq Computer Corp. (NYSE: CPQ).
Compaq is expected to return a profit of 5 cents a share in its third quarter.
After disappointing the Street in each of its past two quarters, Compaq's stock price has suffered. It was trading below $19 a share Friday.
Amazon.com Inc. (Nasdaq: AMZN) will report its third-quarter results this week.
After losing 28 cents a share last quarter, analysts are expecting it to lose only 26 cents a share this time.
eToys Inc. (Nasdaq: ETYS) and eBay Inc. (Nasdaq: EBAY) are also on tap. eToys is expected to lose 28 cents a share and eBay should return a profit of a penny a share.