STRONG corporate earnings led Wall Street to a 29-month closing high for a second day yesterday, but another run of big gains may be harder to achieve.
The Dow and the S&P struggled to advance past major technical levels – the 12,000 mark for the Dow and 1,300 for the S&P – but investors see more gains for companies that outperform in their earnings.
Microsoft surprised Wall Street with a better-than-expected profit, but its shares stayed flat as investors expressed concern about the weakness of computer sales.
Microsoft stock ended regular trading up 0.3 per cent at $28.87 after the earnings were posted on the company’s website. Microsoft was down slightly in after-hours trading.
Other technology stocks, such as Netflix and Qualcomm, supported the Nasdaq, but disappointing results from blue chips AT&T and Procter & Gamble kept the Dow’s advance in check.
“What’s healthy is that companies that come out with good reports are being rewarded and those that are not are getting punished,” said Randall Warren, president at Warren Financial Service in Philadelphia.
The Dow Jones industrial average finished up 4.39 points, or 0.04 per cent, at 11,989.83.
The Standard & Poor’s 500 Index closed up 2.91 points, or 0.22 per cent, at 1,299.54. The Nasdaq Composite Index was up 15.78 points, or 0.58 per cent, at 2,755.28.
Movie-rental company Netflix soared 15.2 percent to $210.87 and electronics test equipment maker Teradyne jumped 11.8 per cent to $16.35. Both posted results Wednesday after the close.
Dow components AT&T and P&G fell as their profits slid from the year-ago period. AT&T dropped 2.1 per cent to $28.13, while P&G lost 2.9 per cent to $64.18. “The market is not viewing everything as being correlated, like it used to before,” Warren said.
The technology sector, however, may start off weak on Friday, pressured by Amazon.com and Sandisk, both of which slipped after reporting after the market’s close.
Amazon.com posted quarterly revenue that fell short of analysts’ estimates.