Microsoft, Amazon Diverge After Big Day For Stocks

Microsoft ( MSFT – news – people ) posted earnings of 51 cents a share in its fiscal fourth quarter, beating the consensus call by a nickel. The software firm’s revenue of $16 billion was ahead of estimates as well, even though online services was slightly weaker than a year ago and the XBox-driven entertainment and devices division saw a slight decline from the prior quarter. Microsoft gained 2.9% before the release.

On the flip side, Amazon.com ( AMZN – news – people ), which rallied 2.3% earlier, plunged more than 15% after hours thanks to a disappointing quarterly report. The online retailer posted 45 cents a share in earnings, well below the 54 cents analysts anticipated.

Revenue topped expectations at $6.6 billion, and the company’s revenue forecast for the third quarter of between $6.9 billion and $7.6 billion encompassed the consensus estimate of $7.1 billion. Earlier Thursday the market brushed off reports showing existing home sales fell 5.1% in June from a month earlier and initial jobless claims rose to 464,000 last week from 427,000 a week earlier to post impressive gains. Encouraging data out of Europe contributed to the advance, as did strong reports and upbeat guidance for the back half of 2010 from the likes of AT&T ( T – news – people ), Caterpillar ( CAT – news – people ), 3M ( MMM – news – people ) and UPS ( UPS – news – people ).

At the closing bell the major indexes were all up at least 2%, with the Dow gaining 202 points to 10,322, the S&P 500 adding 24 points to 1,094 and the Nasdaq tacking on 59 points to 2,246.

AT&T was among the winners on the 30-stock Dow, adding 2.4% after reporting second-quarter earnings were up 26% from a year ago. The gain was largely thanks to a boost in its wireless division, a business that got a big lift from the launch of Apple‘s ( AAPL – news – people ) latest iPhone during the period.