Blue Chips Climb

Strong earnings from International Business Machines powered blue-chip stocks higher even as discouraging quarterly reports from other bellwethers kept a lid on broader market gains.

Stocks searched for direction in early trading as investors digested strong quarterly earnings reports from IBM against disappointing results from Google and General Electric. Steven Russolillo reports on Markets Hub. (Photo: AP)

The Dow Jones Industrial Average rose 68 points, or 0.6%, to 12693, in Friday afternoon trading. The Standard & Poor’s 500-stock index declined two points, or 0.1%, to 1313, and the Nasdaq Composite slipped three points, or 0.1%, to 2785. Each were poised to finish with a third straight weekly gain.

Blue-chip tech stocks pushed the Dow toward its fourth consecutive gain. IBM rose 4.2% after reporting late Thursday better-than-expected fourth-quarter earnings and indicated that 2012 earnings would exceed forecasts.

Microsoft advanced 5.2% after the company late Thursday reported fiscal second-quarter earnings that beat expectations, with revenue essentially in line. The company also lowered its operating expense outlook for 2012.

Intel gained 2.2% after the chip maker late Thursday topped fourth-quarter earnings and revenue forecasts, amid strength in the personal-computer business, and provided a first-quarter revenue outlook that was in line with current estimates.

“My sense is that [corporate earnings reports] so far seem to support that the idea that companies have a greater ability to sustain profits than had been anticipated,” said Jeff Lancaster principal at Bingham, Osborn & Scarborough, which manages more than $2 billion in San Francisco.

[stocks0120] Associated Press

Google fell 8.4% and was S&P 500′s biggest laggard after reporting late Thursday fourth-quarter earnings and revenue that fell short of expectations. The average cost that advertisers paid Google per click declined from year-ago levels. Despite Google’s decline, technology stocks on the S&P 500 were one of three sectors in positive territory on Friday.

General Electric recovered from early loses to edge 0.1% higher after the conglomerate’s fourth-quarter earnings topped estimates but revenue came up short, with discontinued operations weighing on results.

American Express fell 2% after the company late Thursday beat earnings estimates but revenue fell short of expectations.

Weakness in the credit-service industry spilled into Capital One Financial. Shares slumped 6.7% after the credit card-issuer-turned bank reported disappointing fourth-quarter earnings late Thursday as loan-loss provisions increased.

SunTrust Banks bolstered the financial sector. Shares rose 5.2% after the regional bank announced fourth-quarter earnings slipped 16%, but that credit costs continued to decline.

European markets slipped but managed to string together a fifth consecutive weekly gain. The Stoxx Europe 600 fell 0.3% and finished with the first decline in five sessions. Talks between Greece and its private creditors over a debt-restructuring plan agreed to in October began, with reports suggesting an agreement with private creditors was close.

Asian bourses were broadly higher, as data showed that manufacturing activity in China contracted in January but at a slightly slower pace than in December. China’s Shanghai Composite climbed 1%, and Japan’s Nikkei Stock Average gained 1.5%.

Gold futures rose 0.6% to $1,664.60 a troy ounce, while crude-oil prices slipped 1.7% to $98.89 a barrel. The dollar gained ground against both the euro and the yen.

Schlumberger climbed 0.8%. Fourth-quarter earnings rose 36% as the oil-field-services company saw revenue jump in North America.

Skyworks Solutions climbed 11% after the semiconductor maker exceeded forecasts for fiscal first-quarter earnings and revenue, and indicated that second-quarter revenue would be above current estimates.

Fifth Third Bancorp slid 4.4% as the regional bank’s fourth-quarter earnings and revenue missed expectations.

Intuitive Surgical reported that fourth-quarter earnings rose 25%, but the surgical-robot maker’s shares dropped 6.7% on concerns about slowing growth in the number of procedures using its surgery machines.

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