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US STOCKS-Wall St climbs in wake of Washington deal; IBM drops

* IBM, eBay earnings drag tech sector

* Goldman Sachs falls after earnings

* Verizon earnings boost lifts telecoms

* Indexes: Dow off 0.23 pct; S&P up 0.46 pct; Nasdaq up 0.45 pct

By Chuck Mikolajczak

NEW YORK, Oct 17 (Reuters) - U.S. stocks rose on Thursday as investors assessed the ramifications of an agreement by lawmakers in Washington to raise the U.S. debt ceiling and end the partial shutdown of the government, but a decline in IBM pulled the Dow lower.

Congress on Wednesday approved an 11th-hour deal to end a partial government shutdown and pull the world's biggest economy back from the edge of default that could have brought about financial calamity.

The political wrangling has led some investors to believe the U.S. Federal Reserve will have no choice but to leave its fiscal stimulus measures in place for at least several months as the damage caused to the economy becomes apparent.

A Reuters survey showed economists have grown less optimistic about prospects for the economy as the fight over fiscal policy takes its toll.

"The scare that was created by the lengthy delay in resolving the issue has created a situation that has taken Fed tapering off the table for a considerable period. That is viewed as bullish," said Stephen Massocca, managing director at Wedbush Equity Management LLC in San Francisco.

"What is going to hold it back is earnings are not going to be good and from what we've seen so far - IBM, eBay - we will see more of the same and that is going act as a restraint."

The Dow was dragged lower by International Business Machines Corp's shares hitting a two-year low a day after reporting weaker than expected revenue. The tech bellwether was also the worst performing stock on the S&P 500, trading down 6.3 percent to $174.98.

The Dow Jones industrial average fell 35.48 points or 0.23 percent, to 15,338.35, the S&P 500 gained 7.97 points or 0.46 percent, to 1,729.51 and the Nasdaq Composite added 17.334 points or 0.45 percent, to 3,856.765.

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 63 percent beat rate since 1994 but below the 66 percent average over the past four quarters.

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

EBay Inc dropped 3.4 percent at $51.67 as the biggest drag on the Nasdaq 100 index after the company gave a disappointing holiday forecast on Wednesday, saying the U.S. economic environment had deteriorated partly because of the government shutdown. The S&P technology index declined 0.3 percent, the only major S&P sector in negative territory.

Goldman Sachs shares fell 2.6 percent to $158.05 after the fifth-largest U.S. bank by assets said its quarterly profit dropped amid weak bond-trading volumes.

Verizon Communications Inc was a bright spot as shares rose 3.6 percent to $48.97 after the company posted stronger-than-expected third-quarter earnings and revenue. The S&P telecom index climbed 1.8 percent as the best performing of the ten major S&P sectors.

Data on Thursday showed the number of Americans filing new claims for unemployment benefits dropped from a six-month high last week but remained elevated as California continued to deal with a backlog related to computer problems.

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