Strong tech earnings push Dow near 3-year high
NEW YORK – Strong earnings from technology companies including Intel Corp. sent stocks sharply higher Wednesday. The Nasdaq composite index had its biggest one-day jump in six months, and the Dow Jones industrial average closed at its highest level in nearly three years.
Intel rose 7.8 percent, the most of the 30 companies in the Dow average, after the chip-maker reported that its income rose 29 percent in the first quarter because of rising demand for personal computers. The results easily beat analysts' expectations and allayed concerns that surging sales of tablet computers would hurt Intel's results.
Industrial conglomerate United Technologies Corp. rose 4 percent. The company's income jumped 17 percent, also beating Wall Street expectations. The company also raised its forecast for 2011 profit.
The Dow jumped 186.79 points, or 1.5 percent, to close at 12,453.54. That's the highest close since June 5, 2008.
The Nasdaq rose 57.54, or 2.1 percent, to 2,802.51. The tech-heavy index hadn't jumped that much since Oct. 5. The Standard & Poor's 500 index rose 17.74, or 1.4 percent, to 1,330.36.
With the gains, all three indexes turned positive for the week. Stocks took a steep slide Monday after Standard & Poor's warned that it might lower its rating on U.S. government debt in the next two years. The Dow lost 140 points.
The tech rally could stretch into Thursday with help from earnings results Apple Inc. reported after the market closed. The company's results were well ahead of analysts' estimates on both sales and profits. Apple rose 2.5 percent in after-market trading.
The stronger earnings reports came after mainly disappointing results released last week. Google Inc. and Alcoa Inc. were among the big companies whose earnings didn't live up to expectations.
"The contrast from last week is driving stocks," said Clark Yingst, chief market analyst at investment bank Joseph Gunnar.
Several other prominent companies also reported much stronger earnings. Freeport-McMoRan Copper & Gold Inc. jumped 3 percent after the mining company's income came in well ahead of analysts' expectations.
Wynn Resorts Ltd. rose 6.5 percent after its revenue climbed 39 percent. The casino operator opened a new Macau resort and won more money from gamblers at table games in Las Vegas.
IBM Corp. also beat earnings expectations but the stock was flat after the company said it signed fewer overseas contracts.
Yahoo Inc. rose 4.6 percent after reporting that cost-cutting efforts pushed its earnings above Wall Street's expectations. Yahoo also reported a 10 percent jump in display advertising.
Not all companies beat expectations. Altria Group Inc. fell 0.9 percent after reporting that it sold fewer cigarettes.
AT&T Inc. fell 0.6 percent after saying it pulled in the lowest number of new subscribers for iPhones because of competition from Verizon.
Wells Fargo & Co. fell 4 percent. The bank reported a sharp decline in new mortgages.
Nearly five shares rose for every one that fell on the New York Stock Exchange. Trading volume was 4.3 billion shares.