From The Associated Press
NEW YORK —
Strong earnings from tech giants nudged the stock market higher Wednesday. Investors also drew encouragement from a vote by the House of Representatives to let the government keep paying all its bills for another four months.
Tech giants 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.
An hour before the closing bell, the Dow Jones industrial average was up 79 points to 13,792, putting it on track to close at its highest level since October 31, 2007. IBM led the Dow’s 30 stocks, surging 5 percent. Without IBM, the Dow would be flat.
The House passed a bill Wednesday afternoon to suspend the government’s borrowing limit until May 19. The Senate’s Majority Leader Harry Reid, D-Nev., said his chamber would immediately move the legislation to the White House.
The Standard & Poor’s 500 index was up three points at 1,495, while the tech-heavy Nasdaq composite rose 14 points to 3,157.
The quarterly earnings season is off to strong start. Of the 83 companies in the S&P 500 that reported through Tuesday, 54 of them have beaten Wall Street’s estimates, according to S&P Capital IQ.
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 January 2. There’s certainly room for people to take profits.”
The S&P 500 index is already up 4.9 percent in 2013. That’s more than half of what most stock-fund investors hope to make in a single year.
IBM’s results beat expectations, thanks to its lucrative Internet-based “cloud” computing business and other software services. IBM also raised its earnings outlook for the current year. Its stock rose $10.12 to $206.19.
Google jumped 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 $44.63 to $747.60.
Another tech giant, Apple, is scheduled to report after the close of trading.
Slumping coal shipments have been a drag on railroad operators, but CSX and Norfolk Southern posted better revenue and profits than expected. The railroads managed to offset some of the hit from falling coal demand by getting more money from carrying car parts, building materials and other products.
Norfolk Southern rose $1.57 to $68.51 while CSX gained $94 cents to $21.74.
In the bond market, the yield on the benchmark 10-year Treasury note dipped to 1.83 percent, down from 1.84 percent late Tuesday.
Among other companies posting quarterly earnings:
— Advanced Micro Devices jumped 9 percent, making it the top stock in the S&P 500. The world’s second-largest maker of microchips, behind Intel, posted a smaller loss and higher revenue than analysts had forecast. AMD rose 30 cents to $2.75.
— Coach plunged 16 percent, or $9.53, to $51.15 after the luxury handbag maker said a challenging economy and heavy price-cutting by competitors weighed on its results. Rivals like Michael Kors have attracted more followers.
— 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 62 cents to $93.57.