Positive earnings from Oracle and Research in Motion boosted technology stocks, while the S&P 500 edged lower.
Oracle climbed 3.9 per cent to $31.46 after it beat expectations in its second quarter and forecast third-quarter profit above current analyst estimates.
New software sales soared 21 per cent year-on-year and the acquisition of Sun Microsystems helped revenue surge 48 per cent.
Analysts at FBR Capital Markets raised their price target for the stock to $36.
“We fully expect Oracle to deliver better-than-expected revenue and cost synergies and exceed its goal for Sun to deliver $1.5bn of operating income in its first year,” they said.
“In addition to the Sun opportunities, we believe the company’s integrated systems strategy, coupled with the upcoming release of Fusion . . . will allow Oracle to take market share from its toughest rivals, including IBM and SAP.”
Larry Ellison, Oracle chief executive, predicted that the company would take market share in some of the most profitable businesses of its rivals Hewlett-Packard and SAP.
Shares in Hewlett-Packard were flat at $41.96 but SAP shares gained 1.2 per cent to $50.06 and IBM added 0.3 per cent to $145.
Research in Motion, maker of the BlackBerry, also issued a forecast above analyst expectations as it said demand for its Curve and Torch models helped sales rise 40 per cent year-on-year. The company predicted revenue in the current quarter would be between $5.5bn and $5.7bn, compared with analyst projections of $5.46bn and earnings per share would be between $1.74 and $1.80, more than the $1.61 predicted.
But analysts at RBC Capital Markets, who class the stock as a “top pick”, still warned that fears over its competitiveness could hang over RIM in the short term.
“Despite strong results, near-term sentiment is expected to remain polarised over RIM’s competitiveness (particularly ahead of a Verizon iPhone), pending visibility catalysts (spec-leading Smartphones, Playbook) which in our view should help re-establish investor confidence regarding RIM’s innovation and competitiveness,” they said.
Shares in RIM, which also beat expectations this quarter, added 1.6 per cent to $60.20 and the wider technology sector gained 0.1 per cent.
Meanwhile, concerns about Europe weighed on investor sentiment after
rating agency Moody’s downgraded Ireland’s credit rating by five notches.
The S&P 500 closed up 0.1 at 1,243.90 but was up 0.2 per cent over the week. The Dow Jones Industrial Average had lost 0.1 per cent to close at 11,491.91, higher by 0.8 per cent on the five days, while the Nasdaq Composite closed 0.2 per cent higher at 2,642.97, almost flat over the week.
The Vix, which measures expected volatility, fell 7.3 per cent to 16.12.
Overnight the US House of Representatives approved the tax bill, which, once the president signs it, will extend Bush-era tax cuts.
“The tax bill is a major positive for next year. I know some people say that it’s not that stimulative but it is that stimulative,” said David Kelly, chief market strategist at JPMorgan Funds. “Economic growth should step up a gear to 4 per cent.”
In deals news, Marshall & Ilsley Corp jumped 18.3 per cent to $6.85 after the regional bank said it had agreed to be acquired by the Bank of Montreal in an all-stock transaction.
“If you look at Canadian banks, we like the strength of their balance sheets, profits growth and the very strong Canadian economy and we think they will continue to be net buyers of troubled bank franchises in the US,” said John Pandtle, portfolio manager at Eagle Asset Management.
Other regional banks rose as investors hoped for more deal activity in the sector. The S&P 500 regional bank index was up 1.5 per cent.