Stocks edged higher on Wednesday as IBM and other tech companies continued a trend of results that beat Wall Street's expectations and propelled the market to a five-day advance.
Internet search company Google Inc added to the advance, rising 5.1 percent to $738.65 a day after Google reported its core business outpaced expectations. Revenue was also higher than expected.
International Business Machines Corp <IBM.N> late Tuesday forecast better-than-anticipated 2013 results and also posted fourth-quarter earnings and revenue that beat expectations. The results helped to allay concerns about the tech sector after Intel Corp gave a weak outlook last week. IBM, the world's largest technology services company, rose 3.8 percent to $203.57.
"Tech companies are really shattering expectations, which is obviously helping markets. There doesn't seem to be an end to this rally," said Todd Schoenberger, managing partner at LandColt Capital in New York.
But gains were limited in the S&P 500 a day after it closed at a level not seen since December 2007. Many investors were also holding off to see earnings from Apple Inc , the most valuable U.S. company which was due to report after the market closes.
McDonald's edged higher 0.2 percent to $93.11 after reporting a rise in fourth-quarter earnings, lifted by an increase in same-store sales. United Tech's earnings fell from the prior year, hurt by large restructuring charges. Shares edged up at $87.91.
On the downside, Coach Inc slumped 15 percent to $51.40 as the S&P's biggest percentage loser after reporting sales that missed expectations.
After the market closes, investors will scour Apple's results for signs the tech giant can continue to grow at an accelerated pace. The stock has been pressured recently by questions raised about demand for Apple's prospects. The stock has fallen 5 percent since the start of the year, compared with gains of 4.6 percent in the S&P 500. It rose 0.4 percent to $507.04 on Wednesday.
"If Apple comes out with a blockbuster number, that would reinforce the argument that stocks are poised to do well in the first part of 2013," Schoenberger said.
The Dow Jones industrial average <.DJI> was up 55.48 points, or 0.40 percent, at 13,767.69. The Standard & Poor's 500 Index <.SPX> was up 0.06 points, or 0.00 percent, at 1,492.62. The Nasdaq Composite Index <.IXIC> was up 10.89 points, or 0.35 percent, at 3,154.06.
Both the S&P 500 and Dow Jones industrial average hit five-year closing highs on Tuesday, with recent gains largely fueled by a strong start to the earning season.
According to the latest Thomson Reuters data, of the 74 S&P 500 companies that have reported earnings so far, 62.2 percent have topped expectations, roughly even with the 62 percent average since 1994, but below the 65 percent average over the past four quarters.
Overall, S&P 500 fourth-quarter earnings rose 2.6 percent, according to Thomson Reuters data. That estimate is above the 1.9 percent forecast from the start of earnings season, but well below the 9.9 percent fourth-quarter earnings forecast from October 1, the data showed.
Republican leaders in the U.S. House of Representatives aim on Wednesday to pass a bill to extend the U.S. debt limit by nearly four months, to May 19. The White House welcomed the move, saying it would remove uncertainty about the issue.
The debt limit issue has hung over the market for weeks, with many investors worried that if no deal is reached to raise the limit, it could have a negative impact on the economy.
(Editing by W Simon and Kenneth Barry)