FINANCIAL MARKETS : Caterpillar, IBM Results Revive the Bullishness

Blue-chip stocks soared Thursday as surprisingly strong earnings reports from IBM and Caterpillar rekindled bullishness on Wall Street.

The Dow Jones industrial average ended 57.45 points higher at 5,124.35. In the broader market, advancing shares led decliners 1,373 to 964 on heavy volume of 449 million shares on the New York Stock Exchange. The Nasdaq composite index rose 8.94 points to 1,007.24.

“We’ve been seeing some real strange stuff,” said Thom Brown, a managing director of Rutherford Brown & Catherwood. “Techs have had some earnings disappointments, but then you’ve got others with staggeringly good results like IBM. This shows the technology stocks are not as dead as the momentum players think they are, he said.

IBM climbed 8 7/8 to 96 after reporting fourth-quarter earnings of $1.7 billion, or $3.66 per share, up from $1.2 billion, or $2.06 a share, a year ago.

Caterpillar jumped 5 1/4 to 59 after posting fourth-quarter earnings of $300 million, or $1.53 a share, up from $279 million, or $1.38 a share.

The gains in IBM and Caterpillar accounted for about 42 points of the Dow 30’s rise.

Stocks were aided by a drop below the 6% level in the long-term bond. The benchmark 30-year Treasury bond rose one-half point, lowering its yield to 5.98% from 6.01% at Wednesday’s close.

Investors have been concerned about earnings growth for technology companies after Intel posted disappointing results earlier this week.

“IBM alleviated some concern investors had about technology earnings,” said Alan Ackerman, a market strategist at Fahnestock. “People are so focused on earnings that disappointments have been devastating and positive earnings help move stocks higher,” he said.

Traders said the overall market was also boosted by buying ahead of today’s so-called double-witching expirations of options on individual equities and equity indexes.

Wall Street was also eagerly awaiting today’s December jobs report for clues as to whether the Federal Reserve Board might lower interest rates. Its policy-setting committee will meet on Jan. 30 and 31 to consider rate levels.

Topping the NYSE actives list was Wal-Mart, which fell 1 1/8 to 19 1/4. The retailer lost 2 1/8 on Wednesday on its warning that it will report lower earnings for its fourth quarter.

Apple Computer lost 2 1/16 to 31 15/16 after reporting a first-quarter loss Wednesday of $69 million, or 56 cents a share, compared with a profit of $188 million, or $1.55 per share, for the quarter a year ago.

After the close, Microsoft posted second-quarter earnings of $575 million, or 90 cents a share, which was above analysts’ expectations of 84 cents a share. The software company’s shares rose 2 3/4 to 87 5/8 and were trading at 89 after hours.

Bankers Trust fell 2 3/8 to 63 1/8 on disappointing fourth-quarter results, as did Eastman Kodak, down 2 3/8 to 67 after posting lower-than-expected fourth-quarter and annual earnings.

The Standard & Poor’s composite index of 500 stocks rose 1.87 points to 608.24. The American Stock Exchange index fell 4.16 points to 529.05. The NYSE composite index of all listed common stocks rose 0.86 point to 326.15. The average share was up 10 cents.

Oil prices rose again Thursday. February crude ended up 66 cents at $19.18 a barrel on the New York Mercantile Exchange.

Market participants continued to downplay the chances that Iraq will be able to sell oil in the world market.