IBM's results lift Dow average to 5-year high

The Dow Jones Industrial Average rose 67.12 points to close at 13,779.33. That's the highest level since Oct. 31, 2007, a month before the Great Recession started.

Google and IBM reported surprisingly solid fourth-quarter earnings late Tuesday, a hopeful sign for investors who expected tech companies to struggle at the end of last year.

IBM's results beat expectations, thanks to its lucrative Internet-based “cloud computing” business and sales of software services to Brazil, Russia and other developing countries. The company also raised its earnings outlook for the current year. IBM led the Dow's 30 stocks, rising US$8.64 to US$204.72.

Without IBM's 4-percent gain, the Dow would have been nearly flat.

Other indexes made slight gains. The Standard & Poor's 500 index inched up 2.25 points to 1,494.81, while the tech-heavy Nasdaq composite rose 10.49 points to 3,153.67.

The stock market has climbed so quickly this month that it will likely take more than good earnings to keep it heading higher. “This market is really stretched,” said Clark Yingst, chief market analyst at the securities firm Joseph Gunnar. “We've essentially gone straight up since Jan. 2. There's certainly room for people to take profits.”

The S&P 500 index is already up 4.8 percent in 2013. That's more than half of what most stock-fund investors hope to make in a single year.

The House passed a bill Wednesday afternoon to suspend the government's borrowing limit until May 19. Senate Majority Leader Harry Reid, D-Nevada, said his chamber would immediately move the legislation to the White House.

House Republicans had previously said they would use the debt ceiling as a bargaining chip to push for deeper government spending cuts.

Google gained 6 percent after its earnings climbed at the end of last year as online advertisers spent more money in pursuit of holiday shoppers. Google rose US$38.63 to US$741.50.

Another tech giant, Apple, fell in after-hours trading after reporting sales that fell short of forecasts.

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