Stocks Closed Higher on Tech Rally
U.S. stocks ended near their highs of the day on Wednesday, after Intel Corp.’s (NASDAQ:INTC) forecast gave a lift to tech stocks and following testimony from Federal Reserve Chairman Ben Bernanke. The Dow Jones Industrial Average rose 103.16 points, or 0.81%, to 12,908.70. The S&P 500 added 9.11 points, or 0.67%, to 1,372.78. The Nasdaq Composite rose 32.56 points, or 1.12%, to 2,942.60.
Intel Corp.’s stock posted solid gains Wednesday after the chip giant scaled back expectations in a way that assured Wall Street that things aren’t as bad as many feared. The Santa Clara, Calif.-based company reported a second-quarter profit of $2.83 billion, or 54 cents a share, compared with a profit of $2.95 billion, or 54 cents a share. Revenue was $13.5 billion, up from $13.03 billion. Adjusted profit was 57 cents a share.
The Federal Reserve said the economy expanded at a “modest to moderate” pace in June and early July, as retail sales and manufacturing cooled in some regions.
The U.S. economy expanded modestly in June and early July, but growth and hiring slowed in several parts of the country. The key findings of the Federal Reserve survey echoed the gloomier outlook that Chairman Ben Bernanke offered to Congress this week. Three of the Fed’s 12 banking districts — New York, Philadelphia and Cleveland — reported weaker growth, according to the Beige Book survey released Wednesday. A fourth, Richmond, said economic activity was mixed.
IBM says its second-quarter earnings rose 6 percent despite a downturn in revenue amid Europe’s economic jitters. IBM earned $3.9 billion, or $3.34 per share, for the three months ending in June. That compares with net income of $3.7 billion, or $3 per share, at the same time last year. Revenue totaled $25.8 billion for the latest quarter, down from $26.7 billion last year.
Hedge fund Pershing Square Capital Management told investors this week that it recently sold its position in Citigroup and used that money to buy shares of Procter & Gamble.
The $7 billion settlement between Visa, MasterCard, some large banks and retailers, if approved, sends a strong message to consumers: Buck up and plan on paying for the privilege of using a credit card or any other payment method.