Buoyed by strong earnings results in the technology sector and progress in the Washington fiscal budget debate, US stocks have closed higher.
The Dow Jones Industrial Average on Wednesday rose 67.12 points (0.49 per cent) to 13,779.33, its highest level since October 2007.
The broad-based S&P 500 advanced 2.25 (0.15 per cent) to 1,494.81.
The tech-heavy Nasdaq Composite Index climbed 10.49 (0.33 per cent) to 3,153.67.
Charles Schwab & Co said the market received “a boost from stronger-than-expected bottom-line results” from IBM and United Technologies Corp.
The market was also strengthened by the move by the House of Representatives to suspend the debt ceiling for three months, removing a major uncertainty overhanging markets, at least for the medium term.
Technology companies had a good day following the release of strong earnings results from IBM and Google.
Dow member IBM reported profits that bested expectations and gave a surprisingly good outlook for 2013 based on cloud computing and other initiatives. IBM shares rose 4.4 per cent.
Google surged 5.5 per cent after reporting strong profits, gains in the US digital advertising market and a strong performance on mobile technology.
The robust results at Google and IBM boosted other technology companies, including Apple and Netflix, both of which were set to release earnings after the market’s close. Apple rose 1.8 per cent while Netflix jumped 5.6 per cent.
Dow member McDonald’s finished 0.6 per cent higher after a mixed earnings report. The fast-food company beat analyst expectations on earnings, but offered a cautious outlook on 2013 profits.
United Technologies, another Dow member, jumped 0.7 per cent after it said business surged in the final quarter of the year. The company narrowly bested expectations on quarterly earnings from continuing operations.
MAP Pharmaceuticals surged 58.9 per cent on news that it would be purchased by Allergan in a cash deal priced at a 60 per cent premium to Tuesday’s close.
Luxury retailer Coach slid 14.4 per cent after reporting earnings that fell short of expectations. The company’s chief executive said North American retail sales during the critical holiday season proved disappointing.
Cisco dropped 1.2 per cent on news that it would acquire Israeli-based software developer Intucell Ltd. for $475 million.
Among the sectors that underperformed on Wednesday were energy and banking.
Bond prices were mixed. The yield on the 10-year US Treasury dropped to 1.83 per cent from 1.84 per cent late on Tuesday. The 30-year yield rose to 3.03 per cent from 3.02 per cent. Bond prices and yields move inversely.
