IBM Quarterly Results Bring Gains for Wall Street (AP) (15-01-2008)

NEW YORK (AP) -- Wall Street saw sharp gains on Monday, as the results by IBM encouraged investors to buy back into the stock market. Preliminary estimates show that fourth quarter earnings were 24 percent above year-earlier levels, beating analysts’ forecasts. The Dow gained back over 170 of the nearly 250 points it lost on Friday.

IBM's news, coming before as earnings season is about the get under way in earnest, did raise some hopes that fourth-quarter results might not be as bad as feared.

Financials were also active before a number of banks begin to report their earnings, including Citibank at 11:30 GMT, State Street Corp and US Bankcorp before market opening and Merrill Lynch reports on Thursday.

The Dow gained 171.85, or 1.36 percent, to 12,778.15. IBM was the biggest gainer in the Dow, rising $5.26, or 5.4 percent, to $102.93, while broader stock indicators also rose. The Standard & Poor's 500 index added 15.23, or 1.09 percent, to 1,416.25 and the Nasdaq composite index shot up 38.36, or 1.57 percent, to 2,478.30.

Treasuries were trading higher with the yield on the 10-year Treasury note declining 3.79 percent, down from 3.81 percent late Friday, and then fell to 3.77 percent in after-hours trading on Monday.

With no major economic data on the calendar, investors focused on corporate and commodities news. Gold futures hit a record, briefly venturing above $913 an ounce as the dollar tumbled against other major currencies. The euro reached a new high above $1.49.

Among hard hit retailers Sears Holdings Corp. warned that its upcoming fourth-quarter report could show a decline as high as 51 percent from year-earlier levels, adding to concerns that economic weakness is slowing the retail sector. The company Monday forecast a result of $2.59 to $3.48 a share, which would be down from $5.33 a year before and a Thomson Financial forecast of $4.43 a share. Sears fell $4.79, or 5 percent, to $91.38.

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