Tech, energy buoy markets
Intel earnings lead Wall Street surge; Dow up 256 points
A rally in the technology and energy sectors helped spur a broad Wall Street rebound Wednesday, lifting stocks to their highest levels in a month.
The Dow Jones industrial average climbed 3.1 percent, or 256.72 points, to close at 8616.21 – the biggest point gain for the blue-chip index since March. The broader Standard & Poor’s 500-stock index was up nearly 3 percent, or 26.84 points, to close at 932.68, while the technology-heavy Nasdaq composite index received the biggest lift, climbing 3.5 percent, or 63.17 points, to 1862.90.
Stocks have languished in recent weeks as investors feared that the recession would be more difficult than expected to escape. But traders have recently regained some footing, sending the Dow up 5.8 percent so far this week, and the S&P and Nasdaq up 6.1 percent.
The rally Wednesday was sparked by better-than-expected earnings from Intel. The Silicon Valley computer chip giant reported a loss during the quarter and that sales slipped compared with the same period last year. The company’s results were also weighed down by a charge for a $1.45 billion antitrust fine from the European Commission.
But analysts were impressed by the company’s projection that personal computer sales had already begun to improve and would strengthen further in the second half of the year. The results also marked the company’s best first-quarter to second-quarter growth since 1988, according to an Intel statement.
Intel’s stock climbed 7.2 percent Wednesday to $18.05 a share and helped lifted the rest of the sector. Advanced Micro Devices and IBM were up 8.7 percent and 3.8 percent, respectively.
Intel and Goldman Sachs kicked off what is expected to be a dismal earnings season this week by beating analysts’ expectations. Investors are hoping for signs that corporations can not only beat low earnings projections but present signs that the slump in consumer spending is easing, analysts said. Google, J.P. Morgan Chase and General Electric are all scheduled to report earnings this week.
“We already know companies are cutting costs” to help them meet low earnings expectations, said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. “We would like to see revenue hold up, we want to see a more favorable outlooks.”