Today: Tesla repays its federal loan early and Hewlett-Packard (HPQ) avoids a big dip in profit despite personal-computer industry's downfall. Also: Stocks plunge on Fed concerns, with tech taking a big hit.

The lead: Tesla and Hewlett-Packard stock shoots higher after successes

With doubts about their respective industries continuing to grow, Tesla and Hewlett-Packard stepped up Wednesday to prove they could be the exception to issues rampant at their competitors, and shareholders in the two Palo Alto companies appeared to reap the rewards.

The logo for Tesla Motors is shown at the company headquarters in San Carlos, California June 30, 2008. REUTERS/Robert Galbraith
The logo for Tesla Motors is shown at the company headquarters in San Carlos, California June 30, 2008. REUTERS/Robert Galbraith (© Robert Galbraith / Reuters)

Nearly two years after Fremont solar firm Solyndra shut down despite millions in Department of Energy loans, Tesla did its part to help redeem Silicon Valley's clean-energy industry by repaying the $465 million it received through the same loan program a full nine years before it was due.

"I would like to thank the Department of Energy and the members of Congress and their staffs that worked hard to create the ATVM program, and particularly the American taxpayer from whom these funds originate," Tesla CEO Elon Musk said in a statement. "I hope we did you proud."

The Palo Alto electric car maker used funds raised through a secondary stock offering and convertible debt sale exercised in the wake of its first profitable quarter in the country's history, which helped push Tesla stock to record levels. The string of successes and skyrocketing stock prices are a stick in the eye to those who attempted to lump Tesla in with Solyndra and its electric car rival Fisker, which is fielding offers as a way to avoid pure bankruptcy; GOP presidential candidate Mitt Romney dubbed Tesla a "loser" in speeches and debates during the 2012 presidential contest with President Barack Obama, and former vice-presidential candidate Sarah Palin also has notably dismissed the company as a failed investment by the Obama administration.

A Hewlett-Packard logo is seen at the company’s Executive Briefing Center in Palo Alto, California January 16, 2013. REUTERS/Stephen Lam
A Hewlett-Packard logo is seen at the company's Executive Briefing Center in Palo Alto, California January 16, 2013. REUTERS/Stephen Lam ( © Stephen Lam / Reuters )

"This is another important contribution to what the Obama Administration has done to preserve and promote America's auto industry. This announcement is also good news for the future of America's growing electric vehicle industry," Energy Secretary Ernest Moniz said in a statement.

Hewlett-Packard faces the opposite problem of Tesla: While Musk's firm attempts to thrive in an industry it is helping to create, HP CEO Meg Whitman is attempting to stay relevant in an industry that seems to be facing oblivion. While personal-computer sales plunge because consumers are moving to mobile devices for their computing needs, American PC giants Dell and HP have been paying the price.

However, HP exceeded expectations in its earnings report Wednesday: Despite experiencing a mighty drop in profits year-over-year, the company still raked in $1 billion, or 55 cents a share, on revenues of $27.6 billion during the three-month period. HP also raised its minimum projected annual profits from $3.50 to $3.60 a share, exhibiting that it believes the company will continue to outperform now-diminished expectations.

"I am encouraged by our performance in the second quarter, and I feel good about the rest of the year," CEO Meg Whitman said in a company statement.

HP easily exceeded the quarterly profit projections by analysts, who were looking for 44 cents a share, and made rival Dell's recent quarterly report -- which included a 79 percent year-over-year decline in profits -- look even worse in retrospect. The end result is more respect for the job Whitman is doing in attempting to turn around HP, even if most agree with her own assessment that the company still has a long way to go.

"Meg's regained some people's confidence. Six months ago there was no confidence. Now there is some confidence in management delivering what they say," Deutsche Bank analyst Chris Whitmore told Bloomberg News; he still has the equivalent of a "Sell" rating on HP shares, however.

HP shares have been on a roll in 2013, gaining 80 percent in the past six months to be the best performer among the 30 components of the Dow Jones industrial average. After the earnings report, shares soared even higher: After gaining 12 cents, or 0.6 percent, to close at $21.23, the stock shot up more than 14 percent in after-hours trading to surpass HP's 52-week high of $24.05. Tesla dropped 0.4 percent to $87.24 in regular trading, but moved as high as $89.70 in after-hours action.

Silicon Valley stock report: Tech stocks struggle as market falls

After hours was about the only happy time for investors Wednesday, as indexes took steep falls after news arrived that the Federal Reserve is considering ending its campaign of buying bonds. Tech stocks took the brunt of the damage, with the tech-heavy Nasdaq falling the most of the three major U.S. indexes and the SV150 declining even more.

Silicon Valley's large-cap stocks were hit hard: Google (GOOG) dropped below $900 with a 1.9 percent dip to $889.42, as a Bloomberg Businessweek feature revealed the company's first acquisition from the company's secretive experimental arm, Google X, which purchased an Alameda wind-energy company. The Mountain View company had its Siri competitor, Google Now, added to the list of offending products in the Apple (AAPL)-Samsung beef; Apple was one of the few large-cap Silicon Valley companies to avoid Wednesday's bloodshed, gaining 0.4 percent to $441.35 a day after its contentious appearance on Capitol Hill. Big-name companies that were unable to avoid losses included Oracle (ORCL) and Cisco (CSCO), which each declined 2.8 percent, Yahoo (YHOO) (down 1.7 percent), eBay (EBAY) (down 1 percent) and Netflix (NFLX) (down 3.6 percent).

Smaller social-networking companies also faced weakness, with San Francisco's Yelp declining 6.9 percent to $29.40 in the wake of the combination of GrubHub and Seamless, Facebook falling 2 percent to $25.16 despite a new deal with Pandora and LinkedIn plunging 4 percent to $176.95. Still-private Twitter announced new verification procedures after a series of embarrassing hacks for the San Francisco company.

NetApp and Intuit (INTU) managed post-earnings gains, but they were smaller than they may have been otherwise: NetApp gained 1.8 percent to $37.28 after announcing layoffs while pushing billions back to shareholders, and Intuit rose 1.2 percent to $58.59 after exceeding expectations for the pre-tax season.

Up: NetApp, Intuit, HP, Apple

Down: SunPower (SPWRA), Yelp, Workday, LinkedIn, Netflix, VMware, Oracle, Cisco, Facebook, Google, Adobe (ADBE), Yahoo, Symantec, Advanced Micro Devices, Zynga, Juniper, Electronic Arts (ERTS), eBay, Gilead, Applied Materials

The SV150 index of Silicon Valley's largest tech companies: Down 16.18, or 1.26 percent, to 1,267.6

The tech-heavy Nasdaq composite index: Down 38.82, or 1.11 percent, to 3,463.3

The blue chip Dow Jones industrial average: Down 80.41, or 0.52 percent, to 15,307.17

And the widely watched Standard & Poor's 500 index: Down 13.81, or 0.83 percent, to 1,655.35

Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.