Tech Stocks Lead Advances in New York, IMF Trims World Outlook

Nichole Harper
23 Jan, 2013
New York City

Tech stocks in New York traded higher after Google, IBM and AMD reported better than expected results. Apple is scheduled to release earnings after the close. The International Monetary Fund lowered its estimate for the global economic growth to 3.5%.

[R]12:15 PM New York – Tech stocks in New York traded higher after Google, IBM and AMD reported better than expected results. Apple is scheduled to release earnings after the close.[/R]

Stocks in early trading gained after Google and IBM reported better than expected results.

Market indexes in early trading shot up on results from tech companies but the S&P 500 index trended lower after lawmakers appear to make a progress on the short term solution to the debt ceiling revision.

S&P 500 index was nearly flat at mid-day and the tech heavy Nasdaq rose 0.4%. In addition, a measure of home prices increased 0.6% in November, below the expected increase of 0.7%.

Separately, International Monetary Fund lowered its global growth forecast to 3.5% from the 3.6% estimate in October in 2013. The IMF also estimated world economic growth to recover to 4.1% if the euro zone rebounds.

The IMF estimated world economy to expand at 3.2% in 2012.

Markets in Europe closed mixed. In London, FTSE 100 index gained 0.3% and the DAX index gained 0.1%. In Paris the CAC 40 index decreased 0.4%.

Markets in Asia declined. Nikkei in Tokyo dropped 2.1% and fell for the third day in a row and Hang Seng edged down 0.1% and Sensex in India rose 0.2%.

In corporate news, IBM rallied after it reported better than expected revenues and earnings in the last quarter and lifted its annual earnings outlook for 2013. Advanced Micro Devices soared 10% after the maker of semiconductor reported smaller than expected loss in the fourth quarter but revenues were ahead of expectations.

Google surged 6.5% after the search company reported better than expected earnings but missed sales outlook and said mobile ad click through prices will recover as the smartphones get better.

United Technologies gained 0.5% after the industrial systems maker reported fourth quarter earnings ahead of expectations and reaffirmed its 2013 outlook.

Stocks in Review

Google Inc. ((GOOG)) climbed 6.1% or $43.05 to $745.92 after the technology company reported total revenues in the fourth quarter ending in December climbed 36% to $14.42 billion from $10.58 billion in the same period of last year. Net income in the quarter jumped 7% to $2.89 billion or $8.62 per diluted share compared to $2.71 billion or $8.22 a share a year ago.

Google said advertising revenues in the quarter without deducting traffic acquisition costs increased 25% to $3.08 billion and owned sites revenues surged 67% to $8.64 billion. Network revenues soared 27% of total Google revenues to $3.44 billion and operating income for Google was jumped 29% to $3.75 billion.

International Business Machines Corporation ((IBM)) advanced 6.1% or $11.83 to $207.79 after the information technology provider reported total revenues in the fourth quarter ending in December dropped 1% to $29.30 billion from $29.49 billion in the same period of last year. Net income in the quarter climbed 6% to $5.83 billion or $5.13 per diluted share compared to $5.49 billion or $4.62 a share a year ago.

In the quarter, software segment revenue rose 3% to $7.9 billion and revenue from hardware segment fell 1% to $5.8 billion and gross profit margin increased 51.8% from 49.9% a year ago.

IBM expects to deliver full-year 2013 GAAP earnings per share of at least $15.53.

McDonald’s Corporation ((MCD)) slipped 8 cents to $92.87 after the restaurants operator stated total sales in the fourth quarter ending in December grew 2% to $6.95 billion from $6.82 billion in the same period of last year. Fourth quarter comparable sales increased 0.3% and global comparable sales in the quarter increased 0.1%.

For the year, global comparable sales increased 3.1%, in the U.S. grew 3.3%, Europe gained 2.4% and Asia/Pacific, Middle East and Africa rose 1.4%

Net income in the quarter rose 1% to $1.40 billion or $1.38 per diluted share compared to $1.38 billion or $1.33 a share a year ago period.