IBM's results lift Dow average to a 5-year high
NEW YORK — Strong earnings from tech giants nudged the stock market to a five-year high on Wednesday. Investors drew encouragement from a vote by the House of Representatives to let the government keep paying all of its bills for four more months.
The Dow Jones industrial average rose 66.96 points to close at 13,799.17. That's the highest level since Oct. 31, 2007, a month before the Great Recession started.
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.
IBM's results beat expectations, thanks to its lucrative Internet-based “cloud computing” business and sales of software services to Brazil, Russia and other developing countries. The company raised its earnings outlook for the current year. IBM led the Dow's 30 stocks, rising $8.64 to $204.72.
Without IBM's 4 percent gain, the Dow would have been nearly flat.
Other indexes made slight gains. The Standard & Poor's 500 index inched up 2.22 points to 1,494.78, while the tech-heavy Nasdaq composite rose 10.49 points to 3,153.67.
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 Jan. 2. There's certainly room for people to take profits.”
The S&P 500 index is up 4.8 percent in 2013. That's more than half of what most stock-fund investors hope to make in a single year.
Google gained 6 percent since its earnings climbed at the end of last year as online advertisers spent more money in pursuit of holiday shoppers. Google rose $38.63 to $741.50.
The quarterly earnings season is off to a strong start. Of the 83 companies in the S&P 500 that reported through Tuesday, 54 have beaten Wall Street's estimates.
In the bond market, the yield on the benchmark 10-year Treasury note dipped to 1.83 percent from 1.84 percent late Tuesday.