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U.S. Stock-Index Futures Gain After IBM Earnings Beat Estimates

U.S. Stock-Index Futures Gain After IBM Earnings Beat Estimates

July 19 (Bloomberg) -- U.S. stock-index futures rose after better-than-expected profit and sales from International Business Machines Corp.

``We're going to see some nice earnings-growth rates,'' said Olgerd Eichler, a fund manager at Union Investment GmbH in Frankfurt, which oversees $150 billion. ``It looks like the outlook for tech stocks has improved.'' Eichler said he is ``slightly positive'' on the technology sector.

Intel Corp., whose chips run 80 percent of the world's personal computers, and Yahoo! Inc., the most-visited Internet site, are among more than 30 S&P 500 companies that are due to report quarterly results today.

Standard & Poor's 500 Index futures expiring in September gained 3.10 to 1229.60 as of 7:56 a.m. in New York. Dow Jones Industrial Average futures added 38 to 10,655. Nasdaq-100 Index futures advanced 6 to 1588.

About 80 percent of the 71 S&P 500 companies that reported earnings through yesterday either met or beat expectations, according to data compiled by Bloomberg.

IBM Rallies

IBM shares advanced $3.79 to $85.60. The company said second-quarter earnings, excluding some items, was $1.12 a share, exceeding the average analyst estimate of $1.03 in a Thomson Financial survey. Revenue of $22.3 billion was more than the $21.9 billion analysts expected.

Shares of Armonk, New York-based IBM have fallen 17 percent this year, making it the worst performer in the Dow average.

``We'll continue to have positive surprises in the technology area,'' said Klaus Hagedorn, who manages $873 million at Metzler Investment GmbH in Frankfurt, including IBM shares.

Intel, which has gained 21 percent this year for the second-best performance in the Dow average, is expected to say profit rose 15 percent, according to analysts surveyed by Thomson. Intel, which is due to report after the close of markets, rose 15 cents to $28.38 in Germany.

Yahoo will probably say after the close of trading that second-quarter profit jumped 70 percent, according to analysts polled by Thomson. The stock rose 42 cents to $37 in Germany.

Ford Gains

Ford Motor Co. added 17 cents to $11.10. The No. 2 U.S. automaker said profit excluding some items in the April-to-June period was 47 cents a share. On that basis, Ford was expected to earn 33 cents in a Thomson survey.

Merrill Lynch & Co. may be active. The world's second- biggest securities firm by market value said second-quarter profit increased $1.14 a share on gains in investment banking and trading. Analysts in a Thomson survey expected earnings of $1.08 a share.

Shares of Hewlett-Packard Co. advanced 21 cents to $25.13 in Germany. The world's largest printer maker said it will eliminate 14,500 jobs, or 10 percent of its workforce, in the biggest layoffs since 2002.

Lucent Technologies Inc., the largest U.S. telephone equipment maker, rose 2 cents to $3.15 on the Inet ATS trading system. The company said third-quarter profit before some one- time items was 5 cents a share, beating the 4-cent average analyst estimate in a Thomson survey.

A government report today may show U.S. home construction increased in June for a third straight month, economists said. Builders broke ground on 2.05 million residential units at an annual rate last month, according to the median economist estimate in a Bloomberg News survey, after 2.009 million in May. Starts reached a 21-year high of 2.228 million in February.

To contact the reporter on this story:
Ari Levy in New York at [e-mail].


LINK: http://www.bloomberg.com/apps/news?pid=10000103&sid=aN_r2fXlQ5XI&refer=us