US STOCKS-Wall St rises as Google's surge to record high leads tech rally

Reuters

* Google becomes 2nd S&P company to top $1,000/shr mark

* Morgan Stanley earnings, revenue beat expectations

* Indexes: Dow off 0.03 pct, S&P up 0.40 pct, Nasdaq 0.90pct

By Chuck Mikolajczak

NEW YORK, Oct 18 (Reuters) - The S&P 500 resumed itsrecord-breaking climb on Friday and was on track for its bestweekly gain in more than three months, boosted by earnings fromGoogle, Morgan Stanley and other big companies.

Google Inc was the top performer on both the S&Pand Nasdaq 100 indexes, surging to a record high of$1,007.19 a share a day after it delivered forecast-beatingresults. The shares recently traded up 12.5 percent to $1,000.25while the S&P technology sector gained 1.4percent.

Wall Street was also boosted by growing expectations thatthe Federal Reserve will delay trimming its stimulus measuresdue to the damage inflicted on the economy by the partial U.S.government shutdown that ended on Thursday.

Google is the second component of the S&P 500 to top $1,000,following on the heels of Priceline.com, which crossedthat mark earlier this month. Priceline was up 1.9 percent at$1,051.89.

"There are a couple of companies that are doing well and Godbless them, but is that the rule or the exception?" said BradMcMillan, chief investment officer for Commonwealth Financial inWaltham, Massachusetts.

The S&P 500 was on pace for its third straight gain andseventh climb out of the last eight sessions. The benchmarkindex earlier this week was boosted by investor hopes Washingtonwould reach a deal to end the fiscal stalemate, and gains wereunderpinned on Friday by the outlook for continued easy monetarypolicy from the Fed.

"The presumption is we are going to see continued stimulusmore than we would have - the Fed is still there, the punchbowlis still out, the party is going to continue," McMillan said.

Morgan Stanley shares rose 2.5 percent to $29.64after the company reported a 50 percent rise in quarterlyrevenue as higher income from equities sales and trading offseta drop in its fixed-income business.

General Electric Co shares rose 3.5 percent to $25.55following results. It was the best performer on the blue chipDow index, although declines in Home Depot, down 1.2percent to $74.82, and UnitedHealth, off 4.6 percent to$68.10, kept the Dow near the unchanged mark.

GE said its third-quarter profit and revenue fell amid ashrinking finance business and negative effects of foreigncurrency exchange rates, but Wall Street looked beyond thosenumbers to GE's improving profit margins and growing orderdemand.

The Dow Jones industrial average fell 4.37 points or0.03 percent, to 15,367.28, the S&P 500 gained 6.93points or 0.4 percent, to 1,740.08, and the Nasdaq Composite added 34.918 points or 0.9 percent, to 3,898.064.

According to Thomson Reuters data through Friday morning, ofthe 98 companies in the S&P 500 that have reported quarterlyearnings so far, 62.2 percent have topped Wall Streetexpectations, just shy of the 63 percent average since 1994 andbelow the 66 percent beat rate over the past four quarters.

On a revenue basis, 53.1 percent of the S&P 500 componentshave beaten expectations, short of the 61 percent rate since2002 but above the 49 percent beat rate over the past fourquarters.

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