Bloomberg News

IBM Shares Top $200 for First Time as Technology Stocks Lead

March 05, 2012

International Business Machines Corp. (IBM) closed above $200 for the first time, driven higher as technology companies seize leadership in the U.S. stock market as the Standard & Poor’s 500 Index rally enters its fourth year.

IBM rose 0.9 percent today, crossing a level never before seen when stock splits are factored in. The Armonk, New York- based company has advanced 9.1 percent in 2012, and 140 percent since the bull market for U.S. equities began on March 9, 2009. Computer-related stocks in the S&P 500 have climbed 15 percent since the end of December, the most among 10 industries.

The world’s largest computer-services provider posted a third straight annual gain in 2011 as the S&P 500 (SPX) stalled after surging 39 percent in 2009 and 2010. The shares have increased 3.8 percent since Feb. 21, when their price-earnings ratio dropped to the lowest level since June versus the valuation for S&P 500 technology companies, data compiled by Bloomberg show.

Virginia “Ginni” Rometty succeeded Sam Palmisano this year, becoming the first female chief executive officer in the company’s 100-year history. She inherits a five-year plan that includes boosting software to half of IBM’s earnings, with a focus on programs that help businesses analyze and project trends, as well as on cloud computing and emerging markets.

In January, IBM reported revenue of $107 billion for 2011 and earnings of $13.06 a share, and forecast 2012 earnings that exceeded analysts’ estimates.

IBM has the biggest weight in the 30-company Dow Jones Industrial Average, accounting for 12 percent of its value. The Dow slipped 14.76 points, or 0.1 percent, to 12,962.81 today, while the S&P 500 lost 0.4 percent to 1,364.33.

IBM’s advance came as Apple Inc. (AAPL) sank below a milestone reached last week. The stock dropped 2.2 percent to $533.16 today, sending Apple’s market capitalization below $500 billion. The maker of iPhones and iPad tablet computers became only the sixth U.S. company to climb above that threshold, according to data compiled by S&P. The others are Microsoft Corp., General Electric Co., Cisco Systems Inc., Intel Corp. and Exxon Mobil Corp., in chronological order.

To contact the reporter on this story: Beth Jinks in New York at bjinks1@bloomberg.net

To contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net; Nick Baker at nbaker7@bloomberg.net


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