Blue Chips, Tech Stocks Soar
Technology shares lifted off Tuesday, lifting the rest of the U.S. stock market as another deluge of quarterly earnings reports swamped Wall Street.
The Dow Jones industrial average advanced 121.26 points, or 1.3 percent, to 9,324.58.
"The key to the technology sector is that earnings numbers are coming in," said Arnie Owen, managing director of equities at Cruttenden Roth. "The quality of earnings is good and the outlook for the future is good.
"Every time technology pulls back, there are buyers, and as far as portfolio managers are concerned, these are the must-owns."
Five Dow components pulled the wraps off quarterly report cards. Blue-chips Coca-Cola, Boeing, Merck, Johnson & Johnson, and McDonald's all reported earnings in line or above what Wall Street had anticipated.
By mid-afternoon Tuesday, 248 of the 500 biggest U.S. corporations had checked in with quarterly progress reports, according to Chuck Hill, director of research at First Call Inc. Sixty-seven percent have bettered Wall Street estimates, with earnings coming in 4.7 percent above analysts' expectations on average.
Overseas, Brazil's currency, the real, closed at 1.82 to the U.S. dollar compared to Monday's close of 1.79 and a Tuesday low of 1.96. Credit rating agency Fitch IBCA downgraded Brazil's long-term foreign and local currency ratings, but Brazil's benchmark Bovespa stock index soared 6.3 percent as bargain hunters surfaced.
In China, government officials reiterated that they don't intend to let the Chinese currency, the yuan, float freely. Hong Kong's benchmark Hang Seng stock index inched up 0.1 percent.
Internet stocks punched higher for the third day. Portal and search engine issues did best after Compaq Computer (CPQ) announced plans to spin off its AltaVista search engine as a publicly traded company. Compaq shares advanced 2 9/16 to 49 1/4.
Search engine technology developer Inktomi (INKT) lost 5 3/16 to 129 13/16. It skidded as much as 19 points in the early going on word that Microsoft's Microsoft Network will phase out Inktomi's search engine as its primary search platform.
Among other portal shares, Yahoo! was ahead 39 3/8 to 351 3/8, Excite rose 7 3/8 to 101 3/8, and Infoseek added 3 15/16 to 69 1/8.
After the close of Tuesday's trading session, eBay blew away Wall Street estimates with its fourth-quarter operating net of 7 cents a share. The First Call consensus of research analysts had pegged the figure at 4 cents. The online auctioneer set a three-for-one stock split. Ahead of the news, the stock put on 3 3/8 to 220 7/8.
America Online advanced 8 55/64 to 154 220/256. It expects to release fiscal second-quarter results Wednesday. A First Call poll of analysts shows a consensus forecast of 14 cents.
Imaging Technologies (ITEC) exploded for a 2 7/8-point rise, or 230 percent, to 4 1/8. It launched an electronic commerce Web site 2at www.dealseekers.com to sell computer and imaging hardware nd software.
"Now that the market has pulled back, there is much talk about how the bubble has burst, and the big investment party is over," said Robert Dickey, managing director of technical research at Dain Rauscher Wessels.
"In most cases, as we see it, stocks have had the types of normal and necessary pullbacks that often follow good bullish periods, and are holding their important support levels for the most part," he said. "Most stocks that held up well during the recent decline are primed to rally in the weeks ahead."
In Tuesday's market indicators:
- The Standard & Poor's 500 Index rose 1.5 percent.
- New York Stock Exchange winners outnumbered losers by 15 to 14.
- On the Big Board floor, turnover swelled 21 percent to 878 million shares, well above the recent average of 742 million.
- The Nasdaq Composite advanced 2.7 percent to a record. Advancing issues led decliners by 20 to 19 in the Nasdaq Stock Market. Volume totaled 1.03 billion shares.
- The Russell 2000 Index of small-company stocks gained 0.8 percent.
- In the bond market, the 30-year Treasury fell 3/32, to yield 5.124 percent.