TECHNOLOGY shares drove Wall Street higher yesterday on bets ahead of Intel’s quarterly results that business spending will bolster profits in the sector.
After the bell, Intel Corp, a Dow component and the world’s largest chipmaker, reported a quarterly profit that beat expectations. Its shares rose 2.5 per cent ahead of the results.
Intel results “tell you a lot about what companies are capable of doing post-recession”, said Marc Pado, US market strategist at Cantor Fitzgerald & Co in San Francisco.
“Even on flat revenues companies are going to make money. That’s the coat tail that Intel is going to have for everybody tomorrow.”
Software was also boosted in regular trading after Morgan Stanley added Oracle Corp, the world’s No. 2 business software maker behind Microsoft, to its “best ideas” list and raised its price target.
Oracle gained 2.5 per cent to $25.37 and Microsoft rose 2 per cent to $30.96, leading gains in the Nasdaq.
The Dow Jones industrial average added 29.78 points, or 0.28 per cent, to 10,710.55. The Standard & Poor’s 500 Index rose 2.78 points, or 0.24 per cent, to 1,148.46. The Nasdaq Composite Index gained 8.84 points, or 0.38 per cent, to 2,316.74.
After the bell, Intel shares gained 1.7 per cent to $21.85 and stock futures ticked higher as trading resumed after 4:30pm. Shares of Advanced Micro Devices, an Intel rival, and Microsoft also rose in after-hours trade.
During regular trading, the market rose despite an unexpected drop in December US retail sales and an increase in new jobless claims last week that topped estimates.
“The market was able to shrug off the data because as long as news is bad, government stimulus will keep coming,” said Doug Roberts, strategist at ChannelCapitalResearch.com in Shrewsbury, New Jersey.
In the financial sector, the KBW bank index was up 1.6 per cent, led mainly by regional and mid-size banks. Comerica jumped 2.9 per cent to $34.13 after brokerage Raymond James upgraded its stock.
Bank shares were in the spotlight after US President Barack Obama proposed a fee to make big banks repay taxpayers for bailouts.