* Google and IBM both rally after reporting results
* Apple results due after market closes
* Coach shares plummet after weak quarterly sales
* Indexes: Dow up 0.3 pct, S&P off 0.09 pct, Nasdaq up 0.28 pct
By Chuck Mikolajczak
NEW YORK, Jan 23 (Reuters) - The Dow and Nasdaq edged higher on Wednesday, lifted by IBM and Google whose stronger-than-expected profits helped to soothe investors’ concerns about the tech sector.
IBM’s and Google’s earnings, released after Tuesday’s close, were the latest reassuring fourth-quarter results that pushed the Dow and S&P 500 to five-year highs as worries about the “fiscal cliff” and euro zone debt crisis faded and earnings became the market’s main focus.
International Business Machines Corp forecast better-than-anticipated 2013 results and also posted fourth-quarter earnings and revenue that beat expectations.
Shares in the world’s largest technology services company, climbed 5.5 percent to $206.87, its biggest advance since July, making it by far the largest boost to the Dow.
Worries about the profit potential in the tech sector had increased amid questions about waning demand for Apple Inc products and a weak outlook from Intel Corp last week.
Also helping to boost the tech sector was a 6.1 percent jump in Internet search company Google Inc to $746.02. The Internet search company reported its core business outpaced expectations and revenue was higher than expected.
Despite a 1.3 percent gain in the S&P technology sector , gains on the broader S&P 500 index were limited a day after the benchmark index closed at a fresh 5-year high.
The recent gains have been largely fueled by a stronger than expected start to the earning season, pushing the benchmark S&P index near the 1,500 level, last reached on December 12, 2007, and may make additional gains harder to come by after a 4.6 increase for the month.
“This certainly is new air up here, you have to give it some time at this level,” said Troy Logan, managing director and senior economist at Warren Financial Service in Exton, Pennsylvania.
“More fundamentally, there is less concern about Europe. You need less noise on the political front and the focus back on corporate American growing earnings.”
With tech earnings strong, Thomson Reuters data through Wednesday shows that of the 99 S&P 500 companies that have reported earnings so far, 67.7 percent have topped expectations, above the 62 percent average since 1994 and the 65 percent average over the past four quarters.
The Dow Jones industrial average gained 43.27 points, or 0.32 percent, to 13,755.48. The Standard & Poor’s 500 Index shed 1.32 points, or 0.09 percent, to 1,491.24. The Nasdaq Composite Index added 8.82 points, or 0.28 percent, to 3,152.00.
McDonald’s slipped 0.3 percent to $92.63 after reporting a rise in fourth-quarter earnings, lifted by an increase in same-store sales. Fellow Dow component United Technology Corp’s earnings fell from the prior year, hurt by large restructuring charges. Shares edged up 0.4 percent to $87.86.
On the downside, leather-goods maker Coach Inc plunged 14.8 percent to $51.75 as the S&P’s worst performer after reporting sales that missed expectations. The S&P consumer discretionary sector lost 0.5 percent.
After the market closes, investors will scour Apple’s results for signs it can continue to grow at an accelerated pace. The stock has been pressured recently by questions raised about demand for Apple’s products. The stock has fallen 5 percent since the start of the year, compared with gains of 4.6 percent in the S&P 500. It rose 0.4 percent to $507.04 on Wednesday.
“Pretty much all eyes are on Apple to see what they are going to do this evening. What happened to Apple is they had some misses in the second and third quarters of 2012 and the explanation was anticipation of the new iPhone 5, so this quarter they really have to deliver on that story,” Logan said.
Overall, S&P 500 fourth-quarter earnings rose 2.8 percent, according to Thomson Reuters data. That estimate is above the 1.9 percent forecast from the start of earnings season, but well below the 9.9 percent fourth-quarter earnings forecast from Oct. 1, the data showed.
Republican leaders in the U.S. House of Representatives aim on Wednesday to pass a bill to extend the U.S. debt limit by nearly four months, to May 19. The White House welcomed the move, saying it would remove uncertainty about the issue.
The debt limit issue has hung over the market for weeks, with many investors worried that if no deal is reached to raise the limit, it could have a negative impact on the economy.