US STOCKS-Wall St edges up after Washington deal; IBM drags

Reuters

* IBM, eBay earnings drag tech sector

* Goldman Sachs falls after earnings

* Verizon earnings boost lifts telecoms

* Indexes: Dow off 0.35 pct; S&P up 0.21 pct; Nasdaq up 0.28pct

By Chuck Mikolajczak

NEW YORK, Oct 17 (Reuters) - U.S. stocks edged higher onThursday as investors weighed the impact of an agreement bylawmakers in Washington to reopen the federal government andraise the U.S. debt ceiling, but disappointing earnings from IBMweighed on the Dow.

Congress on Wednesday approved an 11th-hour deal to end apartial government shutdown and pull the world's biggest economyback from the edge of default that could have brought aboutfinancial calamity.

"Today we are in a sigh of relief that we have averted thecrisis, but longer term we haven't solved the problem," said RonFlorance, deputy chief investment officer at Wells Fargo PrivateBank in Scottsdale, Arizona.

"Earnings are going to reflect the damage that was done, andif not the earnings, definitely the forward guidance."

The Dow was dragged lower by International Business MachinesCorp's shares hitting a two-year low a day afterreporting a 4 percent drop in third-quarter revenue, weaker thanexpected. The tech bellwether was also the worst performingstock on the S&P 500, trading down 6 percent to $175.58.

According to Thomson Reuters data through Thursday morning,of the 79 companies in the S&P 500 that have reported earnings,64.6 percent have topped Wall Street expectations, above the 63percent beat rate since 1994 but below the 66 percent averageover the past four quarters.

On a revenue basis, 54.4 percent of companies in the S&P 500have bested Wall Street estimates, below the 61 percent averagesince 2002 but above the 49 percent average for the past fourquarters.

The Dow Jones industrial average fell 53.75 points or0.35 percent, to 15,320.08, the S&P 500 gained 3.64points or 0.21 percent, to 1,725.18 and the Nasdaq Composite added 10.733 points or 0.28 percent, to 3,850.164.

EBay Inc dropped 3.5 percent at $51.59 as thebiggest drag on the Nasdaq 100 index after the companygave a disappointing holiday forecast on Wednesday, saying theU.S. economic environment had deteriorated partly because of thegovernment shutdown. The S&P technology index declined0.4 percent.

Goldman Sachs shares fell 2.3 percent to $158.45after the fifth-largest U.S. bank by assets said its quarterlyprofit dropped amid weak bond-trading volumes.

But Verizon Communications Inc was a bright spot asshares rose 3.7 percent to $49.02 after the company postedstronger-than-expected third-quarter earnings and revenue. TheS&P telecom index climbed 1.8 percent as the bestperforming of the ten major S&P sectors.

Data on Thursday showed the number of Americans filing newclaims for unemployment benefits dropped from a six-month highlast week but remained elevated as California continued to dealwith a backlog related to computer problems.

Other data showed the pace of manufacturing growth in theU.S. mid-Atlantic region slowed slightly in October, but firms'optimism about the future hit a 10-year high, a survey showed onThursday.

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