NEW YORK – U.S. stocks rose sharply Wednesday, driving the Dow Jones industrial average to a record high, after profit reports from Yahoo Inc.(YHOO) and Sun Microsystems Inc. (SUNW) renewed optimism about tech company profits.
The Dow hit an all-time intraday high of 12,623.45 and recorded its first-ever close over 12,600. The S&P 500 rose to its highest close since September 2000 and recorded its best one-day percentage gain in a month. And the Nasdaq recorded its biggest daily gain since early December.
The Dow Jones industrial average was up 87.97 points, or 0.70 percent, at 12,621.77. The Standard & Poor's 500 Index was up 12.14 points, or 0.85 percent, at 1,440.13. The Nasdaq Composite Index was up 34.87 points, or 1.43 percent, at 2,466.28.
AT&T Inc. (T) shares helped drive the Dow to its record after the company's mobile phone service, Cingular Wireless, added to the positive earnings picture. Cingular reported its profit nearly quadrupled as customer growth beat Wall Street estimates, lifting AT&T's shares almost 4 percent.
"Essentially you're just seeing renewed confidence out there in tech growth prospects," said Edward Bretschger, principal of equity sales and trading at First Albany Corp. in New York. "Recent earnings have provided clarity and better visibility into the upcoming quarter."
After the market close, shares of both eBay Inc. and Qualcomm Inc. (QCOM) jumped after they each reported strong quarterly results.
After the market close, shares of eBay jumped 7.3 percent to $32.20, up from a close of $30 on the Nasdaq, as the online marketplace posted a better-than-expected rise in quarterly net profit.
Shares of Qualcomm rose 3.5 percent to $39.98, from a Nasdaq close of $38.62, after the wireless chip maker posted a higher quarterly profit as well.
In regular trading, shares of AT&T, which is scheduled to report results on Thursday, rose 4.3 percent to $36.87, ranking as the biggest positive influence on both the Dow and S&P 500 stock gauges.
Yahoo shares rose on the Nasdaq after it said a new Web advertising system would add to profits sooner than expected.
Yahoo shares were up 7.3 percent to $28.94 and posted their largest one-day percentage gain since April 2004. The move suggested investors were warming to the company. Yahoo shares fell nearly 35 percent last year, making it the fifth worst-performing stock in the Nasdaq for 2006.
Computer maker Sun Microsystems posted a surprise quarterly profit after five quarters in a row of losses, driving its shares up 8.7 percent to $6.15 on the Nasdaq. In addition to turning a profit, Sun announced a $700 million deal with KKR Private Equity Investors LP, allowing the company to fund future growth.
In other tech results, Corning Inc. shares rose 10.9 percent to $20.90 after the maker of glass for flat panel displays and fiber optic cable posted fourth-quarter earnings that topped Wall Street estimates.
Also in a positive sign for the market, the Chicago Board Options Exchange Volatility Index, or VIX, fell to its lowest level in more than a month, suggesting investor fears were on the back burner.
On the downside, shares of McDonald's Corp. (MCD) fell 1.5 percent to $44.16, and were the biggest negative weight on the Dow average as investors sold the stock after the restaurant chain posted quarterly results.
Trading was active on the New York Stock Exchange where about 1.59 billion shares were traded, below the 1.84 billion daily average for last year. On Nasdaq, about 2.26 billion shares traded, above the 2.02 billion daily average last year.
Advancing shares beat declining shares by a ratio of about 7 to 3 on the NYSE and by about 2 to 1 on the Nasdaq.