Stocks rise to five-year high
NEW YORK – Strong earnings from tech giants nudged the stock market to a five-year high Wednesday. Investors drew encouragement from a vote by the House of Representatives to let the government keep paying all of its bills for another four months.
The Dow Jones industrial average rose 67.12 points to close at 13,779.33. That’s the highest level since Oct. 31, 2007, a month before the 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 also 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.
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 already 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 after 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.
Another tech giant, Apple, fell in after-hours trading after reporting sales that fell short of forecasts.
Among other companies posting quarterly earnings:
• Advanced Micro Devices jumped 11 percent, making it the top stock in the S&P 500.
• Coach plunged 16 percent, or $9.93, to $50.75.
• McDonald’s Corp. eked out a higher quarterly profit with the help of its Dollar Menu and the McRib sandwich.