Equities up as Coca-Cola, IBM profits beat forecast

Dow Jones:12,587.42 (+202.26) Nasdaq:2,826.52 (+61.41) S&P 500:1,326.73 (+21.29)

US STOCKS rose yesterday, as President Barack Obama endorsed a bipartisan deficit-reduction plan and International Business Machines (IBM) spurred the largest technology advance in a year.

“It’s a combination of the good corporate earnings and the market is looking for a relief rally from debt-ceiling and deficit negotiations,” said Eric Teal, chief investment officer at First Citizens Bancshares in Raleigh, North Carolina.

US stocks extended gains as President Obama embraced a $3.7 trillion debt-cutting plan by a bipartisan group of senators that would combine tax increases and spending cuts.

Positive earnings reports pushed shares higher early in the day. Among the 36 companies in the S&P 500 that posted results since July 11th, 31 beat the average analyst estimates.

IBM, the biggest computer-services company, climbed 5.7 per cent to a record $185.21, for the largest advance in the Dow.

Microsoft jumped 3.4 per cent to $27.50, Intel climbed 3.4 per cent to $23.03, Oracle increased 3.6 per cent to $32.62 and Broadcom gained 6.2 per cent to $34.68.

Coca-Cola rose 3.1 per cent to $69.22. The world’s largest soft-drink maker posted second-quarter earnings and sales that exceeded the average analyst estimate.

Goldman Sachs slumped 0.9 per cent to $128.19. The fifth-biggest US bank by assets reported second-quarter profit that fell short of analysts’ estimates.

Bank of America fell 1.4 per cent to $9.58, the worst performing stock in the Dow.

Homebuilders advanced after housing starts in the US rose more than forecast in June.

DR Horton climbed 5.4 per cent to $11.90.

Lennar gained 6.6 per cent to $18.52.

Harley-Davidson rose 8.5 per cent to $45.14, the biggest gain in the SP 500.

News Corp rose 5.7 per cent to $15.81. Chairman and chief executive officer Rupert Murdoch told UK lawmakers that he was not responsible for the phone-hacking scandal at News Corp's News of the Worldnewspaper.

Mosaic gained 3.1 per cent to $68.49. – (Bloomberg)