Stocks rise on profit gains from tech cos.
by Bernard Condon, AP Business Writer
October 26, 2013 11:55 PM | 780 views | 0 0 comments | 30 30 recommendations | email to a friend | print
NEW YORK — Strong third-quarter results from technology companies drove investors into stocks Friday, giving the market its third straight weekly gain. After reporting results that topped expectations, Microsoft rose 6 percent and Amazon.com rose 9 percent. The Standard & Poor’s 500 index hit a record. The Nasdaq is the highest it’s been in 13 years.

The gains were broad. All 10 industry groups in the S&P 500 rose, led by telecommunications with an increase of 1 percent.

Earnings for companies in the S&P 500 index are expected to grow 4.5 percent in the third quarter over the same period a year ago, according to S&P Capital IQ, a research firm. While respectable, that rate of growth is less than half what was expected at the start of the year.

Some market watchers say even that profit growth may not last. They note that much of it is coming from cutting expenses, not increasing revenue, as the global economy remains sluggish.

“The question is: What is the outlook for earnings?” Steven Ricchiuto, chief economist at Mizuho Securities, said. “There is only so much you can do with cost-cutting.”

The Dow rose 61.07 points, or 0.4 percent, to close at 15,570.28. The S&P 500 rose 7.70 points, 0.4 percent, to 1,759.77. The S&P also closed at a record high Tuesday. The Nasdaq composite rose 14.40 points, or 0.4 percent, to 3,943.36. That was its highest close since September 2000.

Major U.S. stock indexes have soared this year. The S&P 500 is up 23 percent, the Nasdaq composite 31 percent. In addition to higher earnings, investors have been encouraged by continued economic stimulus from the Federal Reserve.

Comments
(0)
Comments-icon Post a Comment
No Comments Yet
*We welcome your comments on the stories and issues of the day and seek to provide a forum for the community to voice opinions. All comments are subject to moderator approval before being made visible on the website but are not edited. The use of profanity, obscene and vulgar language, hate speech, and racial slurs is strictly prohibited. Advertisements, promotions, and spam will also be rejected. Please read our terms of service for full guides