By Jessica Menton - U.S. stocks closed higher for a third straight session on Wednesday as investors continued to cheer stronger-than-expected earnings from Internet giant Yahoo! Inc (NASDAQ:YHOO).
The Dow Jones industrial average climbed 162.29 points, or 1 percent, to close at 16,424.85. The S&P 500 gained 19.33 points, or 1.05 percent, to end at 1,862.31. The Nasdaq Composite added 52.06 points, or 1.29 percent, to finish at 4,086.23.
After the U.S. markets closed, shares of International Business Machines (NYSE:IBM) fell more than 4 percent following the company’s announcement that fiscal first-quarter profit came in at $2.38 billion, or $2.29 a share, for the period ended March 31, compared with earnings of $3.03 billion, or $2.70 a share, during the same quarter a year-ago.
Excluding one-time items, IBM issued earnings of $2.54 a share on revenue of $22.48 billion. Wall Street had expected the company to post earnings excluding items of $2.54 a share on $22.91 billion in revenue, according to analysts polled by Reuters.
“In the first quarter, we continued to take actions to transform parts of the business and to shift aggressively to our strategic growth areas including cloud, big data analytics, social, mobile and security,” said Ginni Rometty, IBM chairman, president and chief executive officer.
The company’s first-quarter net income was $2.4 billion, down 21 percent year-to-year.
“In the first quarter, we continued to take actions to transform parts of the business and to shift aggressively to our strategic growth areas including cloud, big data analytics, social, mobile and security,” said Ginni Rometty, IBM chairman, president and chief executive officer. “As we move through 2014, we will begin to see the benefits from these actions. Over the long term, they will position us to drive growth and higher value for our clients.”
The information-technology company expects full-year 2014 earnings per share of at least $17, and operating EPS, excluding one-time items, of at least $18.
Shares of International Business Machines (NYSE:IBM) fell 4.18 percent to $188.19 in extended-hours trading.
Also following the closing bell, Google Inc. NASDAQ:GOOGL shares fell more than 5 percent initially after the Internet giant disappointed investors and reported fiscal first-quarter earnings of $6.27 per share, excluding items, on revenue of $15.42 billion.
Analysts expected the tech giant to post earnings excluding items of $6.40 a share on revenue of $15.52 billion, according to Reuters. Although Google’s first-quarter profit rose, it still fell short of Wall Street estimates.
“One other thing to note about Google is that that they’ve missed the last couple of quarters according to what the estimates are, the earnings estimates,” Keith Bliss, senior vice president and director of sales & marketing at Cuttone & Co., Inc., said to the International Business Times before Google’s earnings announcement on Wednesday. “They’re still making billions of dollars every quarter, but they’ve missed. The market is pretty tenuous right here and I think if we see a Google miss, it could perhaps be a catalyst for further sell off in the broader market.”
Google Class A shares (NASDAQ:GOOGL) dropped 3.51 percent to $544.10 in after-hours trading while Class C shares (NASDAQ:GOOG) lost 3.01 percent to $539.80.
Ahead on Thursday’s earnings calendar, bank titans Goldman Sachs Group Inc. NYSE:GS and Morgan Stanley NYSE:MS report befor the market opens along with global food and beverage company PepsiCo Inc. (NYSE: PEP) and technology giant General Electric Co. NYSE:GE.