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By Chris Sanders
NEW YORK (Reuters) - U.S. blue-chip stocks rallied on Wednesday, with the Dow industrials briefly topping the 12,000 mark for the first time on the strength of better-than-expected earnings from IBM, but investor hesitation about the broader outlook for technology profits drove the Nasdaq lower on the day.
The Nasdaq reversed an earlier rise to end lower as communications chip makers such as Qualcomm Inc. (QCOM.O: Quote) fell after lower-than-expected phone sales at No. 2 cell phone maker Motorola (MOT.N: Quote).
The Dow pulled back from its lifetime intraday peak of 12,049.51, hit soon after the market opened as shares of International Business Machines Corp. (IBM.N: Quote) hit a 19-month high following a better-than-expected earnings report.
"Stocks are not cheap any more. On the tech side, despite some good reports, there are concerns the fourth quarter is not going to be that great and many sell-side firms made unfavorable calls on the sector," said Steve Neimeth, portfolio manager for AIG SunAmerica Asset Management in Jersey City, New Jersey.
The Dow Jones industrial average <.DJI> rose 42.66 points, or 0.36 percent, to 11,992.68 -- a fresh record closing high. The Standard & Poor's 500 Index <.SPX> gained 1.91 points, or 0.14 percent, to end at 1,365.96, while the Nasdaq Composite Index <.IXIC> fell 7.80 points, or 0.33 percent, to close at 2,337.15.
The broad S&P 500 Index reached an intraday high at 1,372.87, its highest in nearly six years, but then it traded basically flat.
"While it's (12,000) not a meaningful number to many portfolio managers, the publicity has led a number of momentum-oriented traders to sell the rally," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.
The Nasdaq fell in part due to Apollo Group Inc.(APOL.O: Quote), whose shares sank 22.9 percent, or $11.13, to $37.55 after the for-profit education company said it might have to restate past financial results.
Meanwhile, Qualcomm shares fell 2.1 percent, or 82 cents, to $38.12 on the Nasdaq. Sentiment in the semiconductor sector also was adversely affected by a drop in Texas Instruments (TXN.N: Quote) shares, down 2.4 percent, or 79 cents, at $31.57 on the New York Stock Exchange.
Among the big-cap tech companies, though, IBM shares rose 3.3 percent, or $2.87, to $89.82 on the NYSE, off a 19-month high at $92. IBM was the Dow's top gainer and the No. 2 positive weight on the S&P 500, a day after the world's largest technology services company posted stronger-than-expected quarterly profit.
Intel shares rose 1 percent, or 21 cents, to $21.11 on the Nasdaq, a day after the world's biggest chip maker said it sees a price war with rival Advanced Micro Devices Inc. (AMD.N: Quote) easing. Continued ...
© Reuters 2006. All Rights Reserved.
By Chris Sanders
NEW YORK (Reuters) - U.S. blue-chip stocks rallied on Wednesday, with the Dow industrials briefly topping the 12,000 mark for the first time on the strength of better-than-expected earnings from IBM, but investor hesitation about the broader outlook for technology profits drove the Nasdaq lower on the day.
The Nasdaq reversed an earlier rise to end lower as communications chip makers such as Qualcomm Inc. (QCOM.O: Quote) fell after lower-than-expected phone sales at No. 2 cell phone maker Motorola (MOT.N: Quote).
The Dow pulled back from its lifetime intraday peak of 12,049.51, hit soon after the market opened as shares of International Business Machines Corp. (IBM.N: Quote) hit a 19-month high following a better-than-expected earnings report.
"Stocks are not cheap any more. On the tech side, despite some good reports, there are concerns the fourth quarter is not going to be that great and many sell-side firms made unfavorable calls on the sector," said Steve Neimeth, portfolio manager for AIG SunAmerica Asset Management in Jersey City, New Jersey.
The Dow Jones industrial average <.DJI> rose 42.66 points, or 0.36 percent, to 11,992.68 -- a fresh record closing high. The Standard & Poor's 500 Index <.SPX> gained 1.91 points, or 0.14 percent, to end at 1,365.96, while the Nasdaq Composite Index <.IXIC> fell 7.80 points, or 0.33 percent, to close at 2,337.15.
The broad S&P 500 Index reached an intraday high at 1,372.87, its highest in nearly six years, but then it traded basically flat.
"While it's (12,000) not a meaningful number to many portfolio managers, the publicity has led a number of momentum-oriented traders to sell the rally," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.
The Nasdaq fell in part due to Apollo Group Inc.(APOL.O: Quote), whose shares sank 22.9 percent, or $11.13, to $37.55 after the for-profit education company said it might have to restate past financial results.
Meanwhile, Qualcomm shares fell 2.1 percent, or 82 cents, to $38.12 on the Nasdaq. Sentiment in the semiconductor sector also was adversely affected by a drop in Texas Instruments (TXN.N: Quote) shares, down 2.4 percent, or 79 cents, at $31.57 on the New York Stock Exchange.
Among the big-cap tech companies, though, IBM shares rose 3.3 percent, or $2.87, to $89.82 on the NYSE, off a 19-month high at $92. IBM was the Dow's top gainer and the No. 2 positive weight on the S&P 500, a day after the world's largest technology services company posted stronger-than-expected quarterly profit.
Intel shares rose 1 percent, or 21 cents, to $21.11 on the Nasdaq, a day after the world's biggest chip maker said it sees a price war with rival Advanced Micro Devices Inc. (AMD.N: Quote) easing. Continued ...
© Reuters 2006. All Rights Reserved.