LONDON (ShareCast) - News that congressional leaders and President Bush have thrashed out an agreement on a $150bn package of family tax rebates and business incentives gave extra impetus to Wall Street, with tech stocks featuring heavily among the top performers.

Earlier, sentiment was helped by an unexpected fall in first-time jobless claims, though US home sales data confirmed that the US housing market is still in a bad way.

Initial jobless claims in the week to 19 January dipped to 301,000 from 302,000 in the preceding week. The four-week moving average slid to a three-month low of 314,750 compared with 328,750 in the preceding week.

Sales of existing homes in the US were the lowest on record in 2007. The National Association of Realtors (NAR) reported that existing home sales fell 2.2% in December to an annualised rate of 4.89m, compared to analysts' expectations of 4.95m. For the whole of 2007, sales were down 12.8% from 2006 levels to 5.65m units.

The Dow-Jones 30 surged 108 points higher to 12,378 to record its second successive triple-digit gain. The S&P Composite rose 13 points to 1,352 while the tech-dominated NASDAQ Composite rose 44 to 2,360.

Computer storage chip maker LSI spearheaded the advance after it indicated first quarter earnings would be almost twice as high as market expectations.

Other tech stocks to do well included Molex, Symantec, Teradyne, Sun Microsystems, Microsoft and Xerox.

Global electronics company Molex surged ahead after further consideration of yesterday’s second-quarter results in which revenues came in higher than expected, thanks to currency translation gains.

Computer utilities firm Symantec was on the up after indicating it expects 2008 earnings to equal or exceed $1.24 a share. Consensus forecasts for Symantec’s 2008 earnings had been in the region of $1.17 a share.

Software company Sun Microsystems was wanted after disclosing a 3.5 basis points improvement in gross margin in its second quarter. Sun’s net income rose to $260m from the second quarter of the preceding year.

Microsoft also climbed higher after surpassing analysts’ expectations with second quarter earnings per share of 50 cents, some 4 cents higher than market consensus. Revenue rose 31% to $16.37bn.

Office equipment company Xerox’s fourth-quarter earnings rose 79% and came in ahead of expectations. The company has benefited from the growing demand for colour laser printers and document management services.

Chip-testing equipment manufacturer Teradyne pleased the market with fourth quarter earnings per share from continuing operations of 9 cents, one penny higher than analysts had expected.

Media company McGraw-Hill, owner of the Standard & Poor’s credit rating agency, climbed higher despite announcing its first fall in profits in seven quarters. The company intends to reduce headcount as the demand for debt ratings diminishes.

Aerospace and defence contractor Lockheed Martin cheered shareholders with an improved outlook for 2008. The company announced fourth quarter net earnings that were up 10% to $799m, taking full year earnings to $3bn, up 20% on 2006.

Investment management firm Franklin Resources topped analysts’ estimates with first quarter earnings per share of $2.12, up from $1.76 in the preceding quarter. Analysts had been expecting earnings of around $1.90 per share.

Record sales of its hæmophilia drug, Advate, helped medical products company Baxter International top broker forecasts with its fourth quarter results.

The Ford Motor Company moved into reverse gear despite reducing losses in the fourth quarter to $2.75 billion, or $1.30 a share, from $5.63 billion, or $2.98, a year earlier, as its plant closure programme reduced costs.

On the downside, eBay gave back yesterday’s gains as analysts got to grips with its results. Citi reduced its stance on the stock from “buy” to “hold”, citing doubts that the company can re-ignite growth in core markets, US and Germany.

Bond insurers Ambac Financial and MBIA also surrendered large chunks of yesterday’s gains after New York's top insurance regulator, Eric Dinallo, moved to downplay expectations of a rescue package for the beleaguered industry. Dinallo stressed that any rescue plan would be complex and would take time to finalise.

Pennsylvania's second-largest bank, Sovereign Bancorp, lost almost a tenth of its value after reporting increased fourth quarter losses.

Phone company AT&T fell back despite posting fourth-quarter earnings that were 61.8% higher than Q4 2006. EPS at 71 cents a share was in line with analysts’ expectations.

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