Big Blue Sends Stocks Into Overdrive
Page 1 of 1
IBM shares surged on Tuesday, sending stocks to their best three-day gain of the year, after the company raised guidance and announced a $15 billion share buyback.
IBM shares jumped 4% after the company said it expects to earn at least $8.25 and as much as $8.35 a share this year. Wall Street analysts were looking for $8.22, according to Thomson Financial. The additional earnings per share will come as the company buys back as much as $12 billion worth of shares this year.
"IBM's profitable growth and consistently strong cash flow enable the company to continue to return value to our shareholders," CEO Samuel J. Palmisano said in a statement.
The news also boosted shares of other Dow technology stocks, including HP, Microsoft and Intel.
The rally came despite dismal news on inflation, housing and consumer confidence and another drop in shares of Google, which fell 4.6% on a comScore report that said paid clicks declined in January. Google shares have also been weighed down by fears that it could face stronger competition from a Microsoft-Yahoo combination.
Apple and Research In Motion were also left out of the rally.
Tessera Technologies plunged 34% on a setback in its patent case against Motorola.
Shanda Interactive soared 13% on its earnings report, and Dell gained 1.7% ahead of its results, which are due out after the close on Thursday.
SanDisk fell 5% a day after its analyst meeting.
The Nasdaq rose 17 to 2344, the S&P gained 9 to 1381, and the Dow surged 114 to 12,684. Volume rose to 4.1 billion shares on the NYSE, and 2.33 billion on the Nasdaq. Advancers led by a 23-10 margin on the NYSE, and 19-10 on the Nasdaq. Upside volume was 72% on the NYSE, and 69% on the Nasdaq. New highs-new lows were 93-71 on the NYSE, and 65-89 on the Nasdaq.