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July 22 (Bloomberg) -- U.S. technology stocks rallied on improving earnings, sending the Nasdaq-100 Index to a 10-year high and extending a weekly gain for the Standard & Poor’s 500 Index, while lower-than-estimated results at Caterpillar Inc. dragged the Dow Jones Industrial Average lower.
AMD rose 19 percent after the chipmaker forecast more sales than analysts estimated. Technology stocks in the S&P 500 gained 1.2 percent, the most among 10 industries, as SanDisk Corp. added 9.6 percent after earnings beat projections. Caterpillar slid 5.8 percent as profit trailed projections because of Japan’s record earthquake and slower demand from China. C.R. Bard Inc. declined 12 percent, the most in the S&P 500, after reporting a loss in the second quarter.
The S&P 500 rose 0.1 percent to 1,345.01 at 4 p.m. in New York and gained 2.2 percent for the week. The Dow Jones Industrial Average dropped 43.25 points, or 0.3 percent, to 12,681.16. Gains in technology stocks pushed the Nasdaq-100 Index up 1.1 percent to a 10-year high.
“You’re seeing fast money gravitate to the large-cap tech names, viewing them as better able to withstand slower economic growth,” said Mark Bronzo, who helps manage $26 billion at Security Global Investors in Irvington, New York in a telephone interview. “There are a couple stocks weighing on the Dow where the earnings came out a little less than expected but overall, earnings have been pretty good. All eyes are on the budget deficit discussion. It’s not a market people really want to short.”
Aid for Greece
Stocks surged yesterday after euro-area leaders eased the terms of loans for cash-strapped nations and announced the latest aid for Greece after eight hours of talks yesterday. Officials empowered their 440-billion euro ($635 billion) rescue fund to buy debt across stressed nations, helping to erect a firewall around Spain and Italy even as they risked temporary default to lighten the Greek debt burden.
“Policy makers have made an important step,” said Jeffrey Palma, global equity strategist at UBS AG, in an interview on Bloomberg Television’s “In the Loop.” “Is this the be-all end-all package? No, and I think we need to be concerned still that there are medium-term challenges, but I do think it eliminates some of those tail risks.”
Quarterly reports from corporations have helped boost U.S. stocks this week. Among 122 S&P 500 companies that have reported earnings since July 11, 83 percent exceeded the average analyst estimate, according to data compiled by Bloomberg. The S&P 500 climbed 2.1 percent this week through yesterday.
--With assistance from Victoria Taylor in New York and Adam Haigh in London. Editors: Joanna Ossinger, Michael P. Regan
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