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IBM feeds Wall St. bulls
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April 22, 1999: 1:56 p.m. ET
Strong earnings from tech bellwether help trigger a broad-based market rally
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NEW YORK (CNNfn) - A strong rally continued to push U.S. stocks higher in afternoon trading Thursday, as investors found inspiration and reassurance in a spectacular earnings report by IBM.
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.
The Dow Jones industrial average, of which IBM is the heaviest-weighted component, was up 118.84 points, or 1.1 percent, at 10,700.26 shortly before 1:30 p.m. ET. Advances edged ahead of declines 1,502 to 1,379 on the New York Stock Exchange, where volume was a boisterous 579 million shares.
The Nasdaq Composite, heavily weighted with IBM's technological compatriots, soared in parallel with the Dow, climbing 54.92 points, or 2.2 percent, to 2,544.00. The S&P 500 index gained 14.26, or 1.1 percent, to 1,350.38. (Click here for a look at today's 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 27/32 of a point in price, for a yield of 5.58 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 later in the session, rising 23-3/8, or nearly 24 percent, to 195-1/4.
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 2-15/16 to 41-3/8 and Gateway (GTW) rose 2-9/16 to 68-9/16.
But trouble-ridden Compaq (CPQ), which has fed the sector's recent gloom with sagging earnings and a corporate shake-up, eased 7/8 to 23-3/8.
Other technology issues looked to Big Blue, with Microsoft (MSFT) advancing 2-5/16 to 84-5/16, Intel (INTC) gaining 2-13/16 to 61-1/4 and Cisco Systems (CSCO) rallying 4-5/16 to 112-1/4.
Helping solidify the rally, shares of CNET (CNET) soared 23-1/2, or almost 20 percent, to 143-1/4 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 2-7/16 to 57-11/16. 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 2-7/8 to 62 after the telecom manufacturer said its profit doubled in the first quarter as revenue grew 33 percent.
And fellow equipment-maker Tellabs (TLAB) rallied 11-7/16, or more than 11 percent, to 114 after late Wednesday the company set a 2-for-1 stock split and a goal of tripling its annual revenue by 2003.
The Baltic wireless giants got a more mixed response to their own earnings reports. Finnish Nokia (NOK) saw American depositary receipts surge 2-15/16 to 81-9/16 on its first-quarter profits of 44 cents per share, which beat estimates by nearly 13 percent. Swedish Ericsson (ERICY), however, slipped 1 to 25-1/16 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 1-15/16 to 136-13/16 after the company reported earnings that exceeded predictions by a penny a share.
The drillers suffered by comparison, with Chevron (CHV) inching up 13/16 to 97-3/16 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 13/16 to 77-5/8 in sympathy. 
-- by staff writer Malina Poshtova Zang with Robert Scott Martin
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