A rebound in technology stocks led to a broad rally Wednesday. Strong reports from Qualcomm (Nasdaq: QCOM) and eBay (Nasdaq: EBAY) after the close of trading could provide the impetus for even further gains.
The Dow Jones industrial average closed at another all-time record high, up 87.97 points to 12,621.77. The Nasdaq composite index rose 34.87 points to 2,466.28.
The advance was earnings driven as little in the way of economic news affected the stock markets.
However, oil prices remained volatile. Crude traded as low as $53.66 a barrel after the Department of Energy said that both oil and gasoline inventories rose in the past week. But, prices reversed and crude closed at $55.37, up 33 cents.
Tech stocks have borne most of Wall Street's concern about the health of corporate earnings in recent weeks. Restive investors, taking their cues from a flurry of profit reports, have been at turns pleased and concerned about the prospects that profit growth will help drive stocks higher following a sharp run-up in 2006.
There was little overall movement in the energy and health sectors in response to President Bush's State of the Union address, during which he called for expanded health insurance coverage and a 20 percent reduction the country's consumption of gasoline over the next 10 years. Some alternative-energy companies pulled back after rising sharply before the speech.
In an essentially all-earnings day, investors were left without new economic data to help provide some clues about the direction of interest rates.
"I think investors were waiting with the techs for the earnings to come out," said Neil Massa, equity trader at John Hancock Funds. "Investors were in the show-me mode. They had to be shown good numbers because they didn't want to take anything for granted because they had been laggards for a while."
Among energy companies, Exxon Mobil Inc. (NYSE: XOM) rose 41 cents to $74.90. The energy sector appeared to take in stride the president's call for austerity in gasoline consumption, though some companies that make a business of alternative energy products were lower. Xethanol Corp. (AMEX: XNL), an ethanol maker, fell 31 cents, or 10.10 percent, to $2.76, while larger rival Archer Daniels Midland Co. (NYSE: ADM) declined 54 cents to $32.09.
Health care stocks also appeared little moved by the speech; Aetna Inc. (NYSE: AET), the insurer, fell 44 cents to $41.74, while drug maker Pfizer Inc. (NYSE: PFE) rose 45 cents to $26.82.
Kim Caughey, equity research analyst at Fort Pitt Capital Group, noted that investors are focusing on earnings reports for comments on current and future business conditions and for hints as to whether inflation will cool adequately to allow the Federal Reserve to lower short-term interest rates.
"Investment mangers are looking at two areas, one is inflation and one is growth," she said. "Far out in the future they kind of tie together because if we have too much inflation the Fed is going the take the punch bowl away."
In other corporate news, Yahoo (NYSE: YHOO) jumped $1.98, or 7.3 percent, to $28.94 after the Internet-search company's fourth-quarter profit topped Wall Street's estimates. The company unveiled an ad search technology and said it expects to draw more revenue from each page view during the year.
Sun Microsystems (Nasdaq: SUNW), a maker of server and storage products, rose 49 cents, or 8.7 percent, to $6.15 after the company reported its first quarterly profit in years as revenue increased. Earnings were above what Wall Street expected.
McDonald's Corp. (NYSE: MCD) fell 69 cents to $44.16 after some analysts said operating profits at the world's largest fast-food came in lower than expected. Overall fourth-quarter earnings were in line with Wall Street's estimates. The company's profit more than doubled amid a spinoff of a burrito chain and strong sales in Europe.
Advanced Micro Devices Inc. (NYSE: AMD) fell $1.48, or 8.5 percent, to $16.03 after the chip maker swung to a loss from a profit in its fourth quarter. Sales of high-margin server chips were flat in the fourth quarter.
Corning Inc. (NYSE: GLW), which makes glass, fiber optics and specialty materials, rose $2.06, or 10.9 percent, to $20.90 after posting a stronger-than-expected fourth-quarter profit amid strong sales of liquid-crystal-display glass for flat-screen televisions. The company forecast strong growth in its glass-monitor business.
Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where consolidated volume came to 2.86 billion shares, compared with 3.02 billion shares traded Tuesday.
The Russell 2000 index of smaller companies was up 8.65, or 1.10 percent, at 794.03.
Overseas, Japan's Nikkei stock average closed up 0.57 percent. Britain's FTSE 100 closed up 1.40 percent, Germany's DAX index finished up 1.04 percent, and France's CAC-40 was up 1.13 percent.
The Associated Press contributed to this report.
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