NEW YORK – U.S. stocks rose Thursday, driving the Dow to its first close over the 14,000 mark, after forecast-topping results from the technology and industrial sectors shifted the market's focus back to earnings optimism, even as Fed Chief Ben Bernanke fanned concerns about the subprime market.
Shares of International Business Machines Corp. (IBM), the world's largest technology services company, pushed the Dow industrials into record territory. IBM, also known as Big Blue, rose 4.3 percent after the company posted a jump in quarterly profit and raised its 2007 earnings forecast.
"Three letters: I B M. You have the bluest of the blue-chip stocks with the best quarter they've had in five years. You don't have to look too far as to why market sentiment is doing well," said Michael James, senior trader at Wedbush Morgan, in Los Angeles.
A 12.5 percent gain in the shares of network equipment maker Juniper Networks Inc. helped the Nasdaq Composite index hit a 6 1/2-year intraday high. More bellwether earnings were due after the closing bell, most notably Google Inc. (GOOG) and Microsoft Corp. (MSFT).
The Dow Jones industrial average was up 82.19 points, or 0.59 percent, to end at a record 14,000.41. The Standard & Poor's 500 Index was up 6.91 points, or 0.45 percent, to finish at 1,553.08. The Nasdaq Composite Index was up 20.55 points, or 0.76 percent, to close at 2,720.04, after earlier hitting 2,724.74, its highest in six-and-a-half years.
GOOGLE AND BANKS SING THE BLUES
In electronic trading after the closing bell, shares of Google dropped 5 percent to $521 after the Web search leader reported profit that fell short of consensus expectations, despite rapid international growth and gains in market share over rivals.
During the regular session, one sector was notably left out of the market's rally: financials. Brokers and banks fell broadly after Federal Reserve Chairman Ben Bernanke told U.S. senators that the housing market correction had further to go and that losses on securities tied to subprime mortgages could range as high as $100 billion.
Citigroup (C) dropped 0.9 percent to $51.13, while an index of bank stocks was down 0.7 percent.
SWEET DAY FOR HONEYWELL AND HP
Diversified manufacturer Honeywell International Inc. (HON) also benefited from earnings that beat Wall Street's estimates. Its stock rose 0.7 percent to $60.98.
Shares of IBM rose 4.3 percent to $115.86 on the New York Stock Exchange, after climbing to $116.48, its highest in more than five years.
Juniper's (JNPR) shares advanced 12.5 percent to $30.06 on the Nasdaq after the company posted higher quarterly profit and lifted its full-year earnings outlook.
Hewlett-Packard Co (HPQ) shares climbed after research reports from Gartner and IDC showed worldwide personal computer sales posted robust second-quarter growth, with HP in the lead. HP shares rose 2.7 percent to $48.40 on the NYSE.
Another major boost to the Dow and the S&P 500 was Exxon Mobil (XOM), which gained 1.3 percent to $92.29 after U.S. crude oil futures briefly hit $76 a barrel for the first time this year during the NYMEX session.
The release of the Federal Reserve's minutes caused investors' some brief unease. Fed officials said housing was likely to remain a drag on the economy for some time, but voiced concern there was not yet "convincing evidence" that a recent moderation in core inflation data could be sustained.
Trading was moderate on the NYSE, with about 1.53 billion shares changing hands, below last year's estimated daily average of 1.84 billion, while on Nasdaq, about 2.24 billion shares traded, above last year's daily average of 2.02 billion.
Advancing stocks outnumbered declining ones by a ratio of about 5 to 3 on the NYSE and by 3 to 2 on Nasdaq.