Tech gains spur market rise


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NEW YORK -- Strong third-quarter results from technology companies drove investors into stocks on Friday, giving the market its third straight weekly gain.

After reporting results that topped expectations, Microsoft rose 6 percent and Amazon.com rose 9 percent. The Standard & Poor's 500 index hit a record. The Nasdaq is the highest it's been in 13 years.

The gains were broad. All 10 industry groups in the S&P 500 rose, led by telecommunications with an increase of 1 percent.

Most companies that have reported third-quarter earnings are beating financial analysts' estimates. Even so, earnings for companies in the S&P 500 index are expected to grow just 4.5 percent over the same period a year ago, according to S&P Capital IQ, a research firm. At the start of the year, earnings were expected to rise at more than twice that pace.

Some market watchers are calling for caution, saying that a significant part of the profit growth has come from cutting expenses, not increasing revenue, as the global economy remains sluggish.

"The question is: What is the outlook for earnings?" Steven Ricchiuto, chief economist at Mizuho Securities, said. "There is only so much you can do with cost-cutting."

The Dow rose 61.07 points, or 0.4 percent, to close at 15,570.28. The S&P 500 rose 7.70 points, 0.4 percent, to 1,759.77. The S&P also closed at a record high Tuesday. The Nasdaq composite rose 14.40 points, or 0.4 percent, to 3,943.36. That was its highest close since September 2000.

Three stocks rose for every two that fell on the New York Stock Exchange.

Microsoft beat analysts' forecasts for revenue and earnings, giving hope to investors that its shift to devices and services from PC-based software will be successful. Microsoft rose $2.01, or 6 percent, to $35.73 after reporting a 17 percent increase in third-quarter net income late Thursday.

Amazon.com was up $31.18, or 9 percent, to $363 as investors continue to shrug off its losses. The online retailer reported late Thursday that its revenue surged 24 percent to $13.8 billion in the third quarter, more than financial analysts had expected.

In bond trading, the yield on the 10-year Treasury note, a benchmark for mortgages and many other kinds of loans, edged down to 2.51 percent from 2.52 percent. The yield has fallen sharply since Sept. 5, when it hit 3 percent, and is the lowest it's been in three months.


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