Tech earnings boost US stocks

A surge in technology shares lifted stocks moderately higher on Wall Street today, as palmOne Inc's strong earnings report injected a bit of life into what has been a stagnant market.

The rally helped investors put aside some of their interest rate concerns.

But while Goldman Sachs Group and Morgan Stanley were rewarded for posting major gains in revenue and soundly beating Wall Street expectations, the rest of the interest rate sensitive financial sector was largely ignored.

Investors continued to wonder whether the Federal Reserve would raise the benchmark rate by a quarter percentage point or a half point when its Open Market Committee meets next week. That kept the markets mixed through most of the session before the tech rally caught on.

“If you look at the sectors, only technology seems to be breaking out to the upside,” said Michael Sheldon, chief market strategist at Spencer Clarke LLC. “Aside from tech, you’re seeing light buying by investors, but it’s not aggressive. There’s no terrific surge in volume. There’s not a lot of strength behind this, but it’s better than nothing.”

The Dow Jones industrial average rose 23.60, or 0.2%, to 10,395.07.

Broader stock indicators were moderately higher. The Standard & Poor’s 500 index gained 4.11, or 0.4%, to 1,134.41, and the tech-heavy Nasdaq composite index was up 19.77, or 1%, at 1,994.15.

While quarterly earnings were strong at both Goldman Sachs and Morgan Stanley, some analysts and investors worried that a slow summer and wariness on the part of individual investors would impact the brokerage houses’ investment businesses, especially if interest rates rise faster than expected. Both companies actually were down for much of today’s session before latching on to the late rally to post strong gains.

Goldman Sachs gained 1.81 to 90.60 after it announced a 71% jump in quarterly earnings, beating Wall Street estimates by an impressive 36 cents per share.

Morgan Stanley doubled its second-quarter earnings from a year ago, beating expectations by 11 cents per share before a one-time 109 million charge related to its aircraft financing business. The brokerage firm was up 90 cents at 52.15.

In the technology sector, palmOne surged 7.90, or 37%, to 29.36 after reporting earnings that surpassed analysts’ estimates by 14 cents per share, thanks to strong demand for its handheld computing devices.

That triggered buying in other technology stocks, particularly semiconductors. Intel rose 52 cents to 28.04, while rival Advanced Micro Devices climbed 57 cents to 14.67.

Wal-Mart Stores, already hurt by lower-than-expected June sales, slumped 87 cents to 54.06 as a judge approved class-action status for a sex-discrimination lawsuit against the company.

The class could involve up to 1.6 million current and former female employees, making it the largest civil rights case in US history.

Advancing issues outnumbered decliners by about 5 to 4 on the New York Stock Exchange, where volume was light.

The Russell 2000 index of smaller companies was up 3.15, or 0.6%, at 571.89.