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Big Blue electrifies Wall St.
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April 22, 1999: 12:10 p.m. ET
Stocks soar in relief after IBM's overnight triumph over profit forecasts
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NEW YORK (CNNfn) - Wall Street rode a tidal wave of buying Thursday after a spectacular earnings report from venerable computer behemoth International Business Machines inspired bullish bravado from investors.
IBM's solid performance, announced late Wednesday, not only lifted the technology sector but contributed also to a broad market advance, lifting everything from big-name blue chips to small-cap issues. Only oil issues seemed reluctant to join the rally.
Although the buying tsunami soon crested, the Dow Jones industrial average, of which IBM is the heaviest-weighted component, was still up 76.46 points at 10,657.88 shortly before 11:30 a.m. ET. Advances edged ahead of declines 1,434 to 1,278 on the New York Stock Exchange, while volume was a boisterous 338 million shares.
The Nasdaq Composite, heavily weighted with IBM's technological compatriots, soared in parallel with the Dow, climbing 43.60 points, or 1.6 percent, to 2,532.68. The S&P 500 index gained 10.60 to 1,346.72. (Click here for a look at today's list of CNNfn's market movers.)
The bond market retreated from early strength, as investors quickly shifted their attention and money to more rewarding stocks. The bellwether 30-year Treasury bond eased 12/32 of a point in price, for a yield of 5.55 percent.
The dollar, however, remained strong against the euro after climbing to a new record high against the European currency overnight, but slipped against the yen.
Big Blue bolsters stocks
The crown jewel of the rally was IBM (IBM), the world's largest computer maker, which late Wednesday reported first-quarter profits that confounded skeptical outlooks on the technology sector by leaving estimates in the dust.
Shares of IBM opened with a bang and hung on throughout the morning, rising 23, or nearly 13 percent, to 194-7/8.
Other computer stocks rejoiced at the sign that outstanding growth in the technology sector was not yet a thing of the past. Dell Computer (DELL) surged 2-9/16 to 41 and Gateway (GTW) rose 2-1/8 to 68-1/8.
But trouble-ridden Compaq (CPQ), which has fed the sector's recent gloom with sagging earnings and a corporate shake-up, eased 3/8 to 23-7/8.
Other technology issues looked to Big Blue, with Microsoft (MSFT) advancing 2 to 84, Intel (INTC) gaining 2-3/8 to 60-13/16 and Cisco Systems (CSCO) rallying 3-7/8 to 111-13/16.
Helping solidify the rally, shares of CNET (CNET) soared 22-7/8, or almost 20 percent, to 143-5/8 after the Web information and programming provider reported results that beat expectations and declared a 2-for-1 stock split.
Xerox (XRX) hung back, with shares falling 2-1/2 to 57-5/8. The imaging giant confessed to flat revenue and profits that met expectations but provided investors with little buying incentive.
Telecoms mostly in favor
Elsewhere in the market, telecommunications stocks also saw a surge amid solid profits in the sector and news of the largest merger deal in the industry -- a marriage between Deutsche Telekom and Telecom Italia that will amount to $82 billion.
Shares of Lucent Technologies (LU) gained 2-5/16 to 61-7/16 after the telecom manufacturer said its profit doubled in the first quarter as revenues grew 33 percent.
And fellow equipment-maker Tellabs (TLAB) rallied 6-5/16 to 108-7/8 after late Wednesday the company set a 2-for-1 stock split and a goal of tripling its annual revenues by 2003.
The Baltic wireless giants got a more mixed response to their own earnings reports. Finnish Nokia (NOK) saw American depositary shares surge 3-5/8 to 82-1/4 on its first-quarter profits of 44 cents per share, which beat estimates by nearly 13 percent. Swedish Ericsson (ERICY), however, slipped 1-5/16 to 24-3/4 after its profits came in at only 6 cents per share, disappointing forecasts of 9 cents.
Finance firms, oil sputters
A late-morning turnaround in banking stocks left the oil sector as the sole holdout in the otherwise exuberant market. The Dow banks reasserted their upward momentum after an opening bout of weakness, while investors pushed shares of American Express (AXP) up 7/8 to 135-3/4 while awaiting that company's earnings statement.
The drillers suffered by comparison, with Chevron (CHV) falling 2 to 94-3/8 after the company blamed "severely depressed" oil prices for sliding profits. Even though the numbers came in above Wall Street's gloomiest forecasts, investors still found little reason to cheer.
Shares of Exxon, which reported similarly gloomy results Wednesday, fell 1-3/16 to 77-1/4 in sympathy. 
-- by staff writer Malina Poshtova Zang with Robert Scott Martin
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