* Sept housing starts surge, buoying homebuilders' stocks
* Intel and IBM slump after results, weigh on Dow
* Bank of America shares volatile in heavy trading
* Dow down 0.3 pct, S&P up 0.2 pct, Nasdaq off 0.2 pct
By Chuck Mikolajczak
NEW YORK, Oct 17 The S&P 500 rose on Wednesday,
putting the benchmark index on track for its third straight day
of gains, as U.S. housing starts hit a four-year high, but weak
results from tech bellwethers curbed the Dow.
Homebuilders' shares climbed after data showed
groundbreaking on new homes jumped 15 percent in September, the
quickest pace since July 2008 - in a sign that the housing
sector's budding recovery is supporting the broader economy.
But both Intel Corp and International Business
Machines Corp tumbled a day after they reported results,
keeping the Dow negative. IBM alone caused a drag of nearly 88
points on the blue-chip average. Intel also pulled on the Nasdaq
100 The S&P technology sector index lost 1
Intel gave a weak fourth-quarter revenue outlook while IBM
posted third-quarter revenue that came in under expectations.
Intel dropped 3.1 percent to $21.65 while IBM lost 5.8 percent
to $198.73. Both were among the biggest drags on the Dow. Intel
also weighed on the Nasdaq.
Bank of America shares slipped 0.5 percent to $9.41
after the second-largest U.S. bank said earnings per share were
break-even and down sharply from the year-ago
Shares of M&T Bank jumped 5 percent to $102.22 after
the company posted third-quarter results, helping push the KBW
Bank index up 1.1 percent.
Financial companies' earnings have yielded mixed results so
far. Earlier this week, results from Citigroup and Goldman
Sachs indicated improvement in the financial sector,
though those reports followed disappointments from JPMorgan
Chase & Co and Wells Fargo.
Earnings "expectations were extremely conservative, and the
results are just not that bad at all. And whenever people begin
to get too far in one direction - meaning earnings are going to
be terrible - generally reality is better than that, and we are
seeing that now," said Tim Ghriskey, chief investment officer of
Solaris Group in Bedford Hills, New York.
The Dow Jones industrial average dropped 33.22
points, or 0.25 percent, to 13,518.56. The Standard & Poor's 500
Index gained 2.25 points, or 0.15 percent, to 1,457.17.
The Nasdaq Composite Index slipped 4.83 points, or 0.15
percent, to 3,096.34.
After the U.S. Commerce Department's report on housing
starts, the PHLX housing index rose 2.5 percent. The
index got a lift from P u lteGroup Inc, up 5.4 percent at
"They were very good numbers. It does seem to us that the
housing market really has bottomed. It's not going to roar
higher, but that is a good thing," Ghriskey said.
The S&P 500 achieved its best two-day advance in a month, a
rise of 1.8 percent through Tuesday's close, on the heels of
last week's drop - its worst weekly decline in four months.
Expectations for a disappointing earnings season, which prompted
the last week's slide, have been tempered this week as more
companies post quarterly results.
According to Thomson Reuters data through Wednesday morning,
quarterly earnings for S&P 500 components are now expected to
fall 1.7 percent from a year ago. With 14 percent of S&P
companies having reported results so far, 64 percent have beaten
Wall Street's earnings expectations - less than the 67 percent
average for the past four quarters.
Apollo Group Inc shares plummeted 20 percent to
$21.99 as the S&P 500's biggest decliner a day after the
company, the owner of the largest for-profit college in the
United States, gave a weak 2013 outlook.
ASML, the world's leading chip gear maker, agreed
to buy Cymer - its key supplier of a light-based
technology crucial to making a new generation of much smaller
and smarter chips - for $2.5 billion. Cymer surged 46.7 percent
to $70.17. In contrast, the U.S.-listed shares of ASML
dropped 8.8 percent to $48.87.