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Sun Keeps Shining on Tech Earnings

And they aren't singing the blues at IBM after another big quarter.

IBM

(IBM) - Get International Business Machines Corporation Report

and

Sun Microsystems

(SUNW) - Get Sunworks, Inc. Report

are the latest high-tech firms to post strong earnings.

IBM reported first-quarter earnings of $2.3 billion, or $2.47 a share, beating estimates by 2 cents and coming in 17% above the year-ago $2.11. Revenues rose 6% to $25.1 billion. IBM closed up 2 1/2 at 197 and was holding around that level in after-hours trading, according to

Mr. Stock.

Sun Microsystems

also bested estimates for its second quarter, reporting earnings of $272 million, or 67 cents per share. The

First Call

consensus called for earnings of 66 cents per share. The result was an 18% increase over the 57-cent per share figure the company posted during its second quarter last year. The company also announced a 2-for-1 stock split.

There was some speculation that there may be some downside to Sun's earnings Thursday, and its stock fell 7 to 98 1/4. But those fears were allayed.

"People were just selling before the news," says

Goldman Sachs

analyst Laura Congiliaro. "Investors have seen the stock run up big-time and they were only expecting Sun to meet estimates." Revenue rose 14% to $2.8 billion.

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Finding Some Support

Amazon.com

(AMZN) - Get Amazon.com, Inc. Report

, 100.

Yahoo!

(YHOO)

, 250. Two round numbers that proved to be important today.

According to Seth Tobias, portfolio manager with

Circle T Partners

, those key levels will determine whether the worst is behind the drop in Internet stocks. If they continue to hold, as he expects, Tobias said the sector has probably "weathered most of the storm," which will allow "the rest of the market to stabilize."

As of the close, both levels were safe. Amazon.com hit a low of 92 9/16 early, but held above 100 for most of the session before closing 7 points lower at 106. Yahoo closed 22 3/4 lower at 265 after hitting a low of 249 3/8.

What also is encouraging, according to Tobias, is that the broad market has not fallen apart even as the two bellwether Internet stocks have fallen so far so fast. There were some big hits in addition to Yahoo.

eBay

(EBAY) - Get eBay Inc. Report

tumbled 31 1/2, or 15%, to 181 3/4.

go2net

(GNET)

slipped 19 1/8, or 16.5%, to 97 3/4.

Xoom.com

(XMCM)

fell 11 3/16, or 22%, to 39 13/16. Analysts' downgrades sent shares of business software company

Visio

(VSIO)

down 13 1/16 to 26 13/16, a 33% drop.

Weathering the storm was

Doubleclick

(DCLK)

, which closed 6 7/16 higher at 94 3/16 after a couple of brokerage upgrades.

BancBoston Robertson Stephens

upgraded the stock to buy from market perform, while

BT Alex. Brown

upgraded the stock to strong buy from buy.