Tech stocks push Wall Street higher

US stocks finished mostly flat in a choppy session yesterday, as investors bet on strong technology earnings even as JPMorgan Chase’s numbers weighed on other market sectors.

Network equipment maker Riverbed Technology boosted the industry and helped buoy the Nasdaq after its quarterly outlook. The stock surged 12.4 per cent to $34.74 (£21.32) on four times the average daily volume over the last 50 days.

“This earnings season is an expectation game,” said King Lip, chief investment officer of Baker Avenue Asset Management in San Francisco.

He said after Riverbed’s competitor F5 Networks reported poor earnings in January, “analysts pretty much thought companies like Riverbed were going to miss. That’s why you see the strong reaction in their shares today.” F5 shares gained 3.1 per cent to $96.70.

JPMorgan Chase shares fell 0.8 per cent to $46.25 after earlier rising more than one per cent. The Dow component beat expectations with its profit, but enthusiasm waned after the bank’s chief executive said in a conference call there would not be another dividend hike soon.

“Most people had expected JPMorgan to do well. That was factored in already,” Lip said.

In an outline of his budget proposal, US president Barack Obama said he would refuse to renew Bush-era tax breaks for wealthier Americans. A deal to extend those cuts last December propelled the S&P 500 to its highest level in two years.

The Dow Jones industrial average gained 7.41 points, or 0.06 per cent, to 12,270.99. The Standard & Poor’s 500 Index inched up 0.25 of a point, or 0.02 per cent, to 1,314.41. The Nasdaq Composite Index added 16.73 points, or 0.61 per cent, to 2,761.52.

EMC led tech shares higher after a Goldman Sachs analyst said he expected a better-than-consensus quarter for the top maker of corporate data storage equipment. EMC’s shares gained 3.3 per cent to $26.69.

The S&P Information Technology Index added 0.7 per cent.

From a technical perspective, the S&P 500 weakened as its daily moving average convergence-divergence, a gauge of short-term relative performance, triggered a “sell” signal for the first time since late March.

Investors seem to be looking ahead to the Federal Reserve’s policy meeting in two weeks, according to Bruce Bittles, chief investment strategist of Robert W. Baird in Nashville. The Fed is expected to detail its exit strategy as a $600bn asset-buying programme comes to an end.