Dow Futures Strong On IBM Turnaround; S&P 500 Up Too

Dow Futures Strong On IBM Turnaround; S&P 500 Up Too

Futures for the S&P 500 index and Nasdaq 100 rose a fraction in late trading Tuesday, while Dow industrials futures rose 0.2% as IBM ( IBM ) soared late on its revenue growth forecast. Meanwhile, chip-gear giant Lam Research ( LRCX ) reported strong results after the close, with ASML ( ASML ) and new breakout Maxim Integrated Products ( MXIM ) due later this week.

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The S&P 500 index rose 0.1% during Tuesday’s session, while the Dow climbed 0.2% to close just below 23,000 after topping that level intraday for the first time.


The Dow may continue to move ahead with the help of long-time laggard IBM, which shot up 5.6% to 154.72 in late trading.

IBM earned $3.30 a share in the third quarter, up from $3.29 a year earlier and beating estimates by 2 cents according to Zacks Investment Research. Revenue was $19.153 billion, down from $19.226 billion a year ago and the 22nd straight year-over-year decline. But Q3’s top line was significantly above views, with cloud computing services revenue up 20%, now accounting for 20% Big Blue’s total sales.

IBM may be finally turning a corner, predicting Q4 revenue of $22 billion to $22.1 billion, representing a gain of as much as 1.5%.

Lam Research

Lam Research reported adjusted first-quarter earnings rose 91% to $3.46, with revenue soaring 52% to $2.48 billion. Analysts had expected EPS of $3.27 and sales of $2.47 billion.

For  the current Q2, Lam Research sees earnings up 63% and revenue 36%, both modestly above views.

Shares of Lam rose 0.5% to 195.55 in late trading. The stock climbed 1.1% during the regular session to 194.55, hitting a new record high. Lam is well extended from a 170.10 buy point cleared last month.

ASML, Maxim Integrated

Lam Research is just the first of a trio of highly rated chip plays with earnings this week.

ASML, a Dutch chip-equipment maker, reports earnings early Wednesday. Analysts expects EPS of $1.28 and revenue of $2.496 billion, both up 23%.

ASML closed down 25 cents to 176.34. Shares are well extended from a 155.83 breakout from a flat base , cleared in early September, and a prior 137.37 entry topped in July.

Maxim Integrated reports on Thursday, but its shares staged a minimalist breakout Tuesday. The stock rose 0.7% to 49.86, just above a 49.80 cup-base buy point. Volume was below average, as it has been for most of its uptrend in the past few weeks.

Maxim Integrated earnings are expected to show a gain of nearly 15% to 55 cents a share, with revenue up 10% to $576 million.


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