* Housing starts surge in Sept, lifting homebuilders
* Intel and IBM slump after results, weigh on Dow
* Bank of America shares volatile in heavy trading
* Dow down 0.09 pct, S&P up 0.28 pct, Nasdaq up 0.09 pct
By Chuck Mikolajczak
NEW YORK, Oct 17 (Reuters) - The S&P 500 rose on Wednesday,
heading for its third straight day of gains, as U.S. housing
starts hit a four-year high, but weak results from tech
bellwethers weighed on the Dow.
Homebuilders climbed after data showed groundbreaking on new
homes jumped 15 percent in September, the quickest pace since
July 2008 and a sign the housing sector was supporting the
Both Intel Corp and IBM tumbled a day after
they reported results, keeping the Dow negative. IBM alone
caused a 66-point drag on the blue chip average.
Intel gave a weak fourth-quarter revenue outlook while IBM
posted third-quarter revenue that came in under expectations.
Intel dropped 2.7 percent to $21.75 while IBM lost 4.3 percent
to $201.85. Both were among the biggest drags on the Dow and
Bank of America swung between small losses and small
gains in heavy, volatile trading after it said per-share
earnings were break-even and down sharply compared with the
But M&T Bank jumped 5 percent to $102.27 after
posting third-quarter results, helping to lift the KBW Bank
index 1.2 percent.
Earnings among financial stocks have yielded mixed results
thus far. Earlier this week, results from Citigroup and
Goldman Sachs indicated improvement in the group, though
those reports followed disappointments from JPMorgan Chase
and Wells Fargo.
"It seems like it's a classic earnings period reaction.
Either people are too exuberant and expectations are raised too
high to beat when the actual number comes out or people are too
pessimistic and the earnings are just not as low," said Rick
Meckler, president of investment firm LibertyView Capital
Management in New York.
After the housing starts report the PHLX housing index
rose 3.5 percent, led by a 4.9 percent climb in DR Horton
Inc to $21.69.
"The housing number gave people some confidence that maybe
we are moving in the right direction economically, so it's one
of those days where the glass seems half full more than half
empty." said Meckler.
The S&P just notched its best two-day advance in a month, a
rise of 1.8 percent, on the heels of its worst weekly decline in
four months. Expectations for a disappointing earnings season,
which prompted the decline, have been dampened this week as more
companies post quarterly results.
The Dow Jones industrial average dropped 11.98
points, or 0.09 percent, to 13,539.80. The Standard & Poor's 500
Index gained 4.14 points, or 0.28 percent, to 1,459.06.
The Nasdaq Composite Index added 2.88 points, or 0.09
percent, to 3,104.06.
According to Thomson Reuters data through Wednesday morning,
earnings for S&P 500 components are expected to decline 1.7
percent from a year ago. With 14 percent of S&P companies having
reported, 64 percent have beaten earnings expectations, less
than the 67 percent average for the past four quarters.
Apollo Group Inc plummeted 18.2 percent to $22.49
as the S&P's biggest decliner a day after giving a weak 2013
ASML agreed to buy Cymer, its key
supplier of a light-based technology crucial to making a new
generation of much smaller chips, for $2.5 billion. Cymer surged
55.9 percent to $74.55 while U.S.-listed shares of ASML shed 4.3
percent to $51.30.