Worries about inflation and economic growth took a back seat on Wednesday, thanks to much better than expected quarterly results from HP.
Stocks opened sharply lower on higher than expected consumer inflation and more weak housing numbers, yet stocks turned higher in the afternoon despite Federal Reserve meeting minutes that echoed the same concerns of slowing growth and rising inflation.
The reason behind the rally was an 8% surge in shares of HP, which sent the rest of the tech sector higher, boosting everything from Dell and IBM to Research In Motion. Dell will report its quarterly results next week.
HP’s ability to weather the economic downturn was a rare bright spot for a market that had been sagging under disappointing results from a number of tech bellwethers.
But AT&T and Verizon were left out of the rally, as shares of both companies fell for a second day on reports that Sprint may join their wireless price war.
3Com plunged 23% on U.S. government opposition to its acquisition by a private equity firm and Chinese firm Huawei Technologies.
Garmin, Limelight Networks, Veraz Networks and Switch & Data all fell on their results.
The Nasdaq rose 20 to 2327, the S&P gained 11 to 1360, and the Dow climbed 90 to 12,427. Volume rose to 3.87 billion shares on the NYSE, and 2.31 billion on the Nasdaq. Advancers led by a 20-12 margin on the NYSE, and 16-12 on the Nasdaq. Upside volume was 68% on the NYSE, and 63% on the Nasdaq. New highs-new lows were 54-97 on the NYSE, and 45-159 on the Nasdaq.