NEW YORK (AP) — Strong earnings from tech giants are nudging the stock market higher early Wednesday, ahead of a planned vote in Congress to raise the country’s borrowing limit.
Tech giants Google and IBM reported surprisingly solid earnings late Tuesday, a hopeful sign for investors. Analysts had projected technology companies would post weak results in the fourth quarter.
House Republicans are expected to vote in the afternoon on a measure to lift the federal government’s debt ceiling, giving it enough room to pay its bills for another three months.
The Dow Jones industrial average rose 54 points to 13,766 as of 11:10 a.m. EST. IBM led the Dow’s 30 stocks, surging 6 percent.
The Standard & Poor’s 500 index was flat at 1,492. The Nasdaq composite rose 11 points to 3,154.
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 4.6 percent to start 2013. That’s roughly half of what most stock-fund investors hope to make in a single year.
Google jumped 6 percent in early trading. Its earnings climbed at the end of last year as online advertisers spent more money in pursuit of holiday shoppers. The stock rose $40.61 to $743.88.
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 $11.36 to $207.48. Apple is scheduled to report its results after the close of trading.
Advanced Micro Devices also reported results that were better than analysts had expected. The world’s second-largest maker of microchips, behind Intel, posted a smaller loss and higher revenue than analysts had forecast. AMD jumped 9 percent, making it the top stock in the S&P 500. It rose 22 cents to $2.65.
Coach plunged 14 percent, or $8.64, to $52.04 after the luxury handbag maker said a challenging economy and heavy price-cutting by competitors weighed on its results. Rivals like Michael Kors are attracting loyal followers.
In the bond market, the yield on the benchmark 10-year Treasury note dipped to 1.82 percent, down from 1.84 percent late Tuesday.
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