Techs push S&P nearer to 1500 barrier
The S&P 500 extended its winning streak to six days after stronger-than-expected profits from IBM and Google alleviated investor concerns about the technology sector.
IBM's and Google's earnings, released after Tuesday's close, followed on the heels of stronger US economic data, which have pushed the Dow and S&P 500 to five-year highs.
The S&P sits just 4.7 per cent from its all-time closing high of 1565.15 and the Dow would hit a record close if it gained 2.8 per cent.
"People were kind of nervous about earnings coming into this quarter but numbers have shown so far strength in earnings," said King Lip, chief investment officer at Baker Avenue Asset Management in San Francisco, citing Google and IBM as examples.
"Technical analysts are looking at this and saying 'the trend is your friend, it's time to be long."' Shares in IBM, the world's largest technology services company, climbed 4.4 per cent to $204.72, in their largest advance in a year, providing just about all of the Dow's 67-point gain.
Also helping the tech sector was a 5.5 per cent jump in Google to $741.50. The Internet search company reported its core business outpaced expectations and revenue was higher than expected.
The S&P technology sector rose 1.2 per cent.
LED maker Cree Inc jumped 22 per cent to $40.85 after it forecast a higher-than-expected third-quarter profit, and reported results above analysts' estimates.
Upscale leather goods maker Coach plunged 16.4 per cent to $50.75 after reporting sales that missed expectations.
Clearing a market hurdle, the US House of Representatives passed a Republican-led plan to extend the country's borrowing authority until mid-May. This delays a confrontation in Congress similar to one in 2011, which generated a stalemate that triggered the first-ever US debt rating downgrade.
The Dow Jones industrial average rose 66.96 points or 0.49 per cent, to 13,779.17, the S&P 500 gained 2.22 points or 0.15 per cent, to 1494.78, and the Nasdaq Composite added 10.49 points or 0.33 per cent, to 3153.67.
The benchmark S&P 500 is a mere 0.35 per cent away from hitting 1500, a level not seen since December 12, 2007.
Thomson Reuters data through Wednesday showed that of the 99 S&P 500 companies that have reported earnings so far, 67.7 per cent have topped expectations, above the 65 per cent average beat over the past four quarters.
Overall, S&P 500 fourth-quarter earnings rose 2.8 per cent, according to Thomson Reuters data. That estimate is above the 1.9 per cent forecast at the start of earnings season.
Netflix shares soared 25 per cent near $130 after reporting fourth-quarter earnings after the closing bell.
McDonald's edged up 0.6 per cent to $93.48 after reporting a rise in fourth-quarter earnings, lifted by an increase in same-store sales. Fellow Dow component United Technology Corp's earnings fell from the prior year, hurt by large restructuring charges. Its shares rose 0.7 per cent to $88.07.
Top U.S. manufacturers sounded a confident note about their expectations for 2013 on Wednesday as fears of the year-end "fiscal cliff" faded into memory.
About 6 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the 2012 daily average of about 6.45 billion shares.
On the NYSE, roughly 15 issues fell for every 14 that rose and on Nasdaq seven declined for every five gainers.