Dow ends higher on IBM boost
NEW YORK (Reuters) - The Dow Jones industrial average rose on Tuesday as IBM boosted its dividend by a third and as companies such as DuPont Co. (DD.N) posted strong earnings.
But the sharpest monthly drop in U.S. existing-home sales in 18 years weighed on the broader market and tempered the Dow's late surge toward the 13,000 milestone. The Dow hit an intraday record of 12,989.86, but pared gains in the last hour of trade.
IBM shares ended up 3.5 percent on the increased dividend and after the world's biggest computer services company also said it will buy back up to $15 billion of its shares.
IBM's surge accounted for more than 26 points of the Dow's rise of 34.54 points, which also was boosted by a 3.3 percent gain in the shares of Honeywell International Inc. <HON.N.
A drop in a gauge of consumer confidence, as well as the weak housing data, kept investors on edge.
"The strength we're seeing in the Dow is really IBM, Honeywell and certainly DuPont. We saw some strong earnings out of DuPont this morning," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York.
"The housing numbers were a negative influence earlier in the day despite what really was some strong earnings," he added.
The Dow Jones industrial average .DJI ended up 34.54 points, or 0.27 percent, at 12,953.94. The Standard & Poor's 500 Index .SPX slipped 0.52 point, or 0.04 percent, to close at 1,480.41. The Nasdaq Composite Index .IXIC ended up 0.87 point, or 0.03 percent, at 2,524.54.
Decliners outpaced advancers on both the Nasdaq and the New York Stock Exchange.
SUN MICRO DROPS, AMAZON.COM UP LATE
Shares of IBM rose to $98.49 on the New York Stock Exchange. Shares of diversified manufacturer Honeywell rose to $52.90, after earlier hitting an almost six-year high of $53.21. Honeywell shares have been rising since the company reported upbeat quarterly earnings on Friday.
Shares of DuPont gained 1.4 percent to $49.86, also on the
NYSE.
After the bell, shares of Sun Microsystems Inc. SUNW.O dropped more than 4 percent from a close of $5.94 on the Nasdaq after the computer maker's quarterly revenue missed Wall Street's estimates. nN24449057
Shares of Amazon.com Inc. (AMZN.O) jumped more than 10 percent from a Nasdaq close of $44.75 after the online retailer reported its quarterly profit more than doubled, raised its full-year outlook and said set a plan to buy back up to $500 million in stock.
In regular trading, Vonage Holdings Corp. (VG.N) was another notable gainer after the Internet phone company said it won a permanent stay of a previous court's injunction that would have barred it from signing up new customers in a patent dispute with Verizon Communications. (VZ.N).
Vonage shares ended up 28.3 percent to $3.72 on the NYSE.
HOMEBUILDERS HIT
But signs that the housing market continued to falter hurt consumer-oriented stocks such as Wal-Mart Stores Inc. (WMT.N), whose shares fell 0.5 percent to $48.69 on the NYSE.
Shares of home builders, including Centex Corp. CTX.N, also fell after the National Association of Realtors reported that March existing-home sales suffered their worst fall since January 1989. For more details, see ID:nN24406503
Centex shares ended down 1.3 percent at $45.22 on the NYSE. The Dow Jones home construction index fell 0.1 percent.
About 1.65 billion shares changed hands on the NYSE, below last year's estimated daily average of 1.84 billion, while on the Nasdaq about 2.33 billion shares traded, above last year's daily average of 2.02 billion.
Declining stocks outnumbered advancing ones by a ratio of about 9 to 8 on the NYSE and by about 6 to 5 on Nasdaq.
