WALL Street stocks were solidly higher yesterday, boosted by better than expected earnings from computer giant International Business Machines. The market ended strongly higher last night, with the Dow Jones Index at 5422.01 up 67.32.
The IBM results awakened sidelined buyers and helped both the blue chip and Nasdaq market shake off the effects of a three week slump.
The strong performance on Wall Street helped to boost European markets, with the ISEQ index of Irish shares ending 19.24 points higher at 2414.64, while, in London, the FTSE 100 gained 15.9 points to 3684.7.
Industry analysts said they were surprised by the resiliency of IBM's results, especially its revenues, in a tough computer industry and amid sluggishness in Europe.
The upbeat results ignited a buying frenzy in IBM's shares, which shot up 10 1/8 to 101 1/2 and then retreated slightly to 100 3/8, up nine from Wednesday's close. IBM remains a universally recognised bellwether for the computer industry and worries about the company's performance had cast a pall over the whole industry recently.
Analysts stopped short of predicting an end to the malaise that had afflicted stocks this summer, preferring to wait and see if the buying interest lasts past Thursday. The Dow Jones index has tumbled sharply on a number of occasions, mainly due to poor results from some high tech companies and doubts about overall corporate earnings.
The stunning IBM rally came just two days after investors dealt a drubbing to Microsoft, whose results also exceeded Wall Street's estimates. Microsoft was up 2 1/2 to 117 1/4. A major difference, said analysts, was the optimistic tone taken by IBM during a conference call to discuss the company's results and outlook, whereas Microsoft warned its stockholders that growth was likely to slow over the coming year.
