Wall Street was cruising confidently higher Thursday as International Business Machines demolished estimates with a massive quarter, providing a big boost to tech and blue-chip stocks.
The Dow Jones Industrial Average remained in record territory, rising 66.73 points to 10648.15 in mid-afternoon trading. Along with Big Blue's strong showing, the Dow found confidence as well in Proctor & Gamble reporting better than expected quarterly profit. American Express and Disney are slated to open their books after the market closes.
Tech stocks continued their march back into the light. The Wired Index advanced 18.41 to 667.96, and the Nasdaq Composite Index was 46.70 higher at 2535.78. The S&P 500 was up 9.90 at 1346.02.
"I see no reason why the market won't keep going up," said Les Childress, president of Childress Investment Research. "There will be times when it stalls, but institutional investors generally feel comfortable buying these valuations."
IBM (IBM) surged 14 percent to US$195.25 after announcing first-quarter earnings of $1.55 a share, way ahead of the anticipated $1.41. Trading in the company's stock had to be delayed 20 minutes in the morning due to a crush of buy orders. IBM said surprisingly healthy demand for personal computers contributed to a 17 percent increase in hardware sales. "It's a great start on 1999," noted Douglas Maine, the company's chief financial officer.
Not only that, it's a powerful so-there to all those who had been writing obits for leading tech firms, and PC makers in particular. Coupled with Microsoft also posting impressive numbers this week, it seems that rumors of the computer industry's demise have been greatly exaggerated.
For its part, Dell Computer (DELL) jumped $2.88 to $41.31 as Ashok Kumar, an analyst with Piper Jaffray, observed that "the tea leaves do look good" for the company. He said Dell's unit sales should grow by about 15 percent this year. Not coincidentally, Intel (INTC) rose $2.81 to $61.25, and Microsoft (MSFT) was $2.19 higher at $84.19.
A busy day as well over in telecom, where investor interest was heightened by confirmation that Deutsche Telekom and Telecom Italia had agreed to get hitched in an $82 billion wedding, creating the world's second-largest telco after Japan's NTT (which is now struggling to make ends meet). This isn't quite a done deal -- legions of shareholders and regulators still must have their say -- but it does underline the ongoing industry trend of bigger definitely being better.
Meanwhile, Lucent Technologies (LU), no small potato itself, climbed $3.06 to $62.19 after reporting that quarterly profit more than doubled to 17 cents a share, excluding charges. This was 2 cents higher than expected. Lucent remains exceedingly bullish about its own prospects, and reiterated a fiscal 1999 forecast of revenue increasing by as much as 20 percent, and earnings per share soaring by about 35 percent.
And across the Atlantic, Finland's Nokia (NOK) gained $3.13 to $81.75 as it blew past estimates with a 97 percent hike in first-quarter operating profit. That's a whole lot of euros. "We further solidified our position as the world's leading mobile phone supplier," crowed CEO Jorma Ollila, adding that the company is boosting spending on R&D and Internet-related activities.
