Strong news from IBM lifts Dow to 5-year high
Posted: 8:23 pm Wed, January 23, 2013
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 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 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 quarterly earnings season is off to strong start. Of the 83 companies in the S&P 500 that reported through Tuesday, 54 have beaten Wall Street’s estimates, according to S&P Capital IQ.
McDonald’s Corp. eked out a higher quarterly profit with the help of its Dollar Menu and the McRib sandwich. The world’s biggest hamburger chain plans to roll out new menu items this year to support sales, including the Fish McBites. McDonald’s inched up 53 cents to $93.48.
In the bond market, the yield on the benchmark 10-year Treasury note dipped to 1.83 percent from 1.84 percent late Tuesday.
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