Published January 13, 2015
U.S. tech stocks rose Wednesday, led by Cisco Systems (CSCO), whose strong profits and outlook reinforced optimism over earnings.
The Dow Jones industrial average inched up just 0.56 of a point, or 0.00 percent, to end at 12,666.87, after earlier touching an intraday record high at 12,700.28.
The Standard & Poor's 500 Index gained 2.02 points, or 0.14 percent, to finish at 1,450.02, just shy of its six-year high at 1,452.99 reached earlier in the day, while the Nasdaq Composite Index climbed 19.01 points, or 0.77 percent, to close at 2,490.50.
The blue-chip Dow average ended the day just barely in positive territory, but backed off a lifetime intraday high after a drop in oil prices hurt energy companies' shares.
The slide in oil futures prices, which had provided support to the broader market earlier, dragged down the shares of major energy companies such as Exxon Mobil (XOM) Corp.
This offset gains made earlier in the stock market after data showed fourth-quarter wage pressures eased while productivity increased, which reinforced the view that the Federal Reserve has no need to raise interest rates for now.
"You have had a precipitous drop in oil, and oil stocks have been kind of a leader in the market over the last couple of days. With the commodity down over a dollar now, you've seen kind of a fill-in in energy-related names, which is having an adverse effect on the S&P," said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles.
The broader market pared its gains as Exxon Mobil shares declined 0.5 percent, making it one of the biggest decliners in both the Dow and the S&P 500. The price of oil fell more than $1 a barrel.
Exxon Mobil shares fell 35 cents to close at $74.79 on the New York Stock Exchange.
U.S. crude oil for March delivery slid $1.17, or 2 percent, to settle at $57.71 a barrel on the New York Mercantile Exchange — well below its NYMEX session high at $59.84.
Cisco ranked near the top of the list of biggest gainers in both the S&P 500 and the Nasdaq 100 as its stock rose 3 percent, or 81 cents, to close at $28.09 on the Nasdaq. This marked Cisco's largest daily gain since Nov. 28. The stock's surge came a day after the network equipment maker's quarterly earnings and outlook beat Wall Street's expectations.
This supported the broader tech sector and pushed the S&P 500's technology index up nearly 0.8 percent.
Apple (APPL) Inc.'s stock rose 2.4 percent, or $2.00, to close at $85.15 on Nasdaq. As the regular trading ended, it ranked No. 1 among the Nasdaq 100's major advancers.
Shares of Vornado Realty Trust , another of the S&P 500's top performers, rallied after the company bowed out of the takeover battle over top U.S. office landlord Equity Office Properties Trust .
Vornado's stock shot up almost 7 percent, or $8.75, to $135.75, while Equity Office shares slid 1.1 percent, or 60 cents, to $55.45, both in NYSE trading.
On the macroeconomic front, a preliminary government report showed U.S. productivity beat expectations in the fourth quarter, while unit labor costs, one of the Federal Reserve's most closely watched inflation gauges, rose slightly less than predicted.
Peter Morici, a professor at the University of Maryland School of Business, noted that this bodes well for corporate profits as companies will have greater scope to maintain or widen their profit margins on their domestic operations.
Volume was moderate on the NYSE, where about 1.48 billion shares changed hands, below last year's estimated daily average of 1.84 billion. On Nasdaq, about 2.24 billion shares traded, above last year's daily average of 2.02 billion.
Advancers outnumbered decliners by a ratio of about 7 to 5 on the NYSE and by about 3 to 2 on the Nasdaq.