By Dan Gallagher, MarketWatch
SAN FRANCISCO (MarketWatch) -- Strong gains by Google Inc. and
International Business Machines Corp. in the wake of fourth-quarter
earnings reports gave a boost to the overall tech sector
Wednesday.
Shares of Apple Inc. and Netflix Inc. posted gains ahead of
their results, due after the closing bell.
The Nasdaq Composite (RIXF) rose 0.3% to close at 3,154, while
the Philadelphia Semiconductor Index (SOX) added 1% and the Morgan
Stanley High-Tech Index (MSH) gained 0.4%.
Google (GOOG) led the way, its shares gaining 5.5% to close at
$741.50. The Web search giant posted strong gains in earnings and
revenue for the fourth quarter, showing improvement in its core ad
business as well as continued losses from its Motorola handset
business.
"Google's Q4 metrics helped calm the biggest Google bear case:
that all-things-mobile were eroding its financial position," wrote
analyst Evan Wilson of Pacific Crest Securities. He lifted his
Google price target to $820 from $795.
IBM (IBM) shares also rose, up 4.4% to close at $204.72,
rallying as the Dow Jones Industrial Average component reported
late Tuesday a gain in fourth-quarter profit and projected an
earnings-per-share target for 2013 above Wall Street's consensus
estimate.
Citigroup analyst Jim Suva called IBM the "best" company for IT
hardware and services. In a note to clients, he cited its
"best-in-class portfolio of products and services," maintaining a
buy rating and a $250 price target on Big Blue.
Apple (AAPL) shares moved up 1.8% to close at $514.01, as the
company got set to report results for the first quarter of fiscal
2013 after the close.
Analysts are expecting sales of about 48 million to 50 million
iPhones, though some are worried that the company's forecast may
show weakening demand for the smartphone.
Due to Apple's huge market capitalization and wide ownership, it
can move the broader stock market. It makes up 10% of the Nasdaq
Composite and 3.6% of the S&P 500 (SPX). The stock is held by
nearly one-fifth of U.S. mutual funds, according to
Morningstar.
Netflix (NFLX) shares rose 5.6% to close at $103.26. In its
fourth-quarter report, investors are likely to focus on subscriber
additions to the company's domestic streaming business.
Also Wednesday, Advanced Micro Devices (AMD) jumped 11.4% to
close at $2.73 following its own fourth-quarter results, while Cree
Inc. (CREE) surged 22% to close at $40.85. Texas Instruments Inc.
(TXN) fell 1% to close at $33.08 following results issued late
Tuesday.
Shares of Molex Inc. (MOLX) fell 3% to close at $27.83 following
its earnings reports on Wednesday. Symantec Corp. (SYMC) rose 3% to
close at $21.46.
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