Wall Street ends higher on Apple, RIM
NEW YORK (Reuters) - Stocks rallied on Tuesday as Apple's strong profit and a Chinese distribution deal for BlackBerry maker Research in Motion suggested the sector is the place to hide from a slowing U.S. economy.
The broader U.S. stock market also gained for a second session, though not as briskly as the tech sector. Quarterly results from blue chips such as American Express (AXP.N) and DuPont (DD.N) showed companies with broad international reach are weathering the credit crisis and U.S. housing market slump.
A more broad-based advance was stymied by disappointing news from retailers at both the high and low ends of the spectrum. Shares of Wal-Mart fell 2.9 percent when it scaled back store expansion plans, while those of pricey fashion accessories seller Coach fell nearly 12 percent after it said slowing store traffic would hurt earnings.
"The line of delineation is so clear as to who are the winners in the global growth story," said Peter Kenny, managing director with Knight Equity Markets, in Jersey City, New Jersey. The rally's "not very broad-based, but there's tremendously strong leadership out of tech."
The Dow Jones industrial average .DJI was up 109.26 points, or 0.81 percent, to end at 13,676.23. The Standard & Poor's 500 Index .SPX was up 13.26 points, or 0.88 percent, at 1,519.59. The Nasdaq Composite Index .IXIC was up 45.33 points, or 1.65 percent, at 2,799.26.
RIM shares surged mid-session after it said it is teaming up with Alcatel-Lucent (ALUA.PA) to distribute the BlackBerry in China.
Tech shares were already in the lead after Apple reported profit and sales late on Monday that handily beat Wall Street's estimates.
Apple rose 6.8 percent to $186.16 and earlier reached a record $188.60. RIM stock jumped 9.8 percent to $124.53, and hit a record $128.36 during the session.
Shares of Google (GOOG.O), which has recently traded in near lock-step with Apple, nearly 4 percent to $675.77 and reached a record high of $677.60.
Shares of online marketplace Amazon.com (AMZN.O) were another swift gainer, with the stock jumping 10.4 percent to $100.82 in anticipation of a blow-out quarterly scorecard. It was the first time the stock had retaken the $100 level since December 1999, but the shares fell about 5 percent to $96 in heavy trading after the bell when it posted results that appeared only slightly ahead of Wall Street's forecasts.
The feeding frenzy in tech took the spotlight off ailing retailers.
Wal-Mart stock lost $1.32, or nearly 3 percent, to $43.93.
On the higher end of the shopping spectrum, shares of Coach (COH.N) shed $4.87, or 11.7 percent, to end at $36.60 on the New York Stock Exchange.
Third-quarter profits have been a source of concern, with earnings growth forecast at just 1.8 percent -- the slowest in about five years -- according to Reuters Estimates.
Trading was moderate on the NYSE, with about 1.31 billion shares changing hands, below last year's estimated daily average of 1.84 billion, while on Nasdaq, about 2.39 billion shares traded, exceeding last year's daily average of 2.02 billion.
Advancing stocks outnumbered declining stocks by a ratio of about 2 to 1 on the NYSE and by 3 to 2 on Nasdaq.