Stocks rise as housing starts overshadow Intel, IBM results

A big jump in new home construction activity helped move stock prices slightly higher on Wednesday.

The Dow Jones Industrial Average rose for the fourth consecutive session, up 5.22 points to 13,557.00. The Nasdaq Composite Index gained 2.95 points to 3,104.12, and the S&P 500 Stock Index rose 5.99 points to 1,460.91.

The Dow would have been higher were it not for weakness in IBM (NYSE: IBM). The stock fell $10.37 to $200.63 after reporting revenues and profits below expectations.

The Commerce Department reported housing starts rose in September by 15 percent to an annualized rate of 872,000 units. That was the fastest rate of growth in more than four years. Building permits, a sign of future construction activity, also rose by 6.7 percent.

Gold rose $6.70 to $1,753 an ounce, and oil was up 3 cents to $92.12 a barrel.

Dean Foods Co. (NYSE: DF) soared 13 percent after its WhiteWave Foods Co. filed to go public. Intel Corp. (Nasdaq: INTC) fell 2.5 percent after forecasting a fourth-quarter gross margin that missed estimates. IBM slid 4.9 percent after reporting third-quarter revenue that trailed analysts’ projections.

“The housing number was amazing,” said Randall Warren, who oversees $75 million as chief investment officer of Warren Financial Service in Exton, Pa. “Corporate earnings have been strong in a slow growth environment, so if housing can help improve the economy then we could see a move up in stocks.”

An S&P gauge of 11 homebuilder stocks rose 3.2 percent. PulteGroup Inc. (NYSE: PHM), the largest U.S. homebuilder by revenue, jumped 5.3 percent to $17.44. D.R. Horton Inc. (NYSE: DHI) gained 4.2 percent to $21.54, while Lennar Corp. (NYSE: LEN) climbed 2.2 percent to $38.13.

Bank of New York Mellon Corp. (NYSE: BK) advanced 5.5 percent to $24.86. The world’s largest custody bank said third-quarter earnings climbed a bigger-than-estimated 11 percent as rising stock prices helped expand customer assets. U.S. Bancorp (NYSE: USB) added 1.8 percent to $34.20 after the nation’s biggest regional lender said profit climbed to a record, beating analyst estimates, as mortgage-banking revenue more than doubled.

Facebook Inc. (Nasdaq: FB) climbed 2.1 percent to $19.88 after a research report said the social network owner is showing signs of success in a push to make money from mobile users. The company is “further along in monetizing mobile advertising” than is generally believed, according to Martin Pyykkonen, an analyst at Wedge Partners Corp. Through Tuesday, the stock had fallen 49 percent since its May 17 initial public offering.

Cymer Inc. (Nasdaq: CYMI) jumped 49 percent to $71.45 after ASML Holding NV (Nasdaq: ASML) agreed to buy the maker of lasers used to manufacture computer chips for $2.6 billion. Cymer investors will receive $20 in cash and 1.15 of ASML’s ordinary shares for every Cymer share they hold, ASML said in a statement Wednesday. The price is 72 percent more than San Diego-based Cymer’s close in New York on Tuesday.

Apollo Group Inc. (Nasdaq: APOL) tumbled 22 percent to $21.40. The largest U.S. for-profit college chain forecast revenue for fiscal 2013 that missed analysts’ estimates and said it would close campuses and cut jobs.

CSX Corp. (NYSE: CSX) declined 2 percent to $21.19 after predicting that two of its biggest markets, coal and agriculture shipments, would be depressed this quarter by the U.S. drought and competition from cheap natural gas.

Textron Inc. (NYSE: TXT) fell 5.7 percent, the most in almost 14 months, to $24.95, after missing analysts’ third-quarter profit estimates as the company sold fewer new Cessna business jets.