US STOCKS-Dow, S&P 500 end at highs on stimulus hopes, IBM

Reuters

* IBM climbs on buyback announcement and lifts Dow

* Consumer confidence sinks on worries about governmentshutdown

* Apple falls a day after reporting results

* Dow up 0.7 pct, S&P 500 up 0.6 pct, Nasdaq up 0.3 pct

By Caroline Valetkevitch

NEW YORK, Oct 29 (Reuters) - The Dow and S&P 500 ended atrecord highs on Tuesday after economic data supported views thatthe Federal Reserve would keep its stimulus intact for severalmonths and IBM rallied after the company announced astock buyback.

IBM gave the biggest boost to the Dow, which led the day'sgains. The stock, which also helped drive the S&P 500's advance,jumped 2.7 percent to $182.12 after the company's board ofdirectors approved another $15 billion for stock buybacks.

In the latest economic data, a gauge of U.S. consumerspending rose in September, but another report showed consumerconfidence fell sharply in October because of worries about theimpact of the partial government shutdown.

The data added to evidence of sluggish economic growth justas the Fed began a two-day policy meeting. Expectations are highthat officials are unlikely to shift monetary policy this weekas they wait for more evidence of how badly Washington's budgetbattle has hurt the U.S. economy.

"The ghosts of tapering are not coming this Halloween,"said Omar Aguilar, chief investment officer for equities atCharles Schwab Corp. "The government shutdown pushed thetapering discussion further out."

That's likely to keep a floor under stocks for the near termat least, though longer term, slow growth in earnings andespecially in revenue may be a concern, he said.

Limiting some of the day's gains in both the Nasdaq and theS&P 500, Apple shares dropped 2.5 percent to $516.68 aday after the iPad and iPhone maker delivered disappointingresults.

The Dow Jones industrial average gained 111.42points, or 0.72 percent, to end at 15,680.35, a record close.The Standard & Poor's 500 Index rose 9.84 points, or 0.56percent, to finish at 1,771.95, also a record closing high. TheS&P 500 hit another intraday record high at 1,772.09.

The Nasdaq Composite Index advanced 12.21 points, or0.31 percent, to close at 3,952.34.

Tuesday's rally brings the S&P 500's gain for the year todate to 24.2 percent.

In the latest technical issue to befall the Nasdaqexchange, the Nasdaq OMX Group said human error leftthe exchange unable to transmit index values for nearly 45minutes, leading to a temporary halt in options trading on somestock indexes.

After the bell, shares of LinkedIn dropped 3.1percent to $239.45 after the social networking company forrecruiters and job seekers gave a conservative revenue forecastfor the fourth quarter and fiscal 2013. LinkedIn shares endedthe regular session at $247.14, up 1.7percent. Shares of videogame publisher Electronic Arts Inc rose 2.8 percent to$24.80 in extended-hours trading after the company reported ahigher quarterly profit. In regular trading, Electronic Artsshares fell 2.8 percent to close at $24.13.

During the regular session, the Dow also got a boost fromPfizer Inc, which rose 1.7 percent to $31.25 after thelargest U.S. drugmaker reported better-than-expectedthird-quarter earnings.

As has been the case in recent quarters, more companies havebeen beating analysts' earnings expectations than revenueexpectations. With results in from 281 of the S&P 500 companies,68.7 percent have topped profit expectations, above thelong-term average of 63 percent, while just 52.5 percent havebeaten revenue estimates, below the 61 percent rate since 2002,based on Thomson Reuters data.

Cummins Inc slumped 5.2 percent to $127.90. It wasthe S&P 500's worst performer after the U.S. maker of enginesand other vehicle components reported lower-than-expectedquarterly profit on Tuesday and cut its full-year outlook.

Another decliner was JPMorgan Chase, down 0.1percent at $52.73 after a person familiar with the situationsaid the preliminary $13 billion deal set by the bank's CEO andthe U.S. attorney general has hit a stumbling block.

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