Today: With shares up more than 80 percent in 2013, HP is expected to continue reporting year-over-year declines in profits and revenues. Also: Netflix (NFLX) hits two-year high, Tesla gains after safety-testing achievement.

The Lead: Hewlett-Packard earnings report arrives amid stock resurgence

With its share price on a hot streak, Hewlett-Packard (HPQ) will face investors Wednesday for its latest quarterly report, with analysts expecting the fifth consecutive quarter of sales and profit declines from the Palo Alto tech giant, two years into CEO Meg Whitman's reign.

HP shares have gained more than 81 percent in 2013, after Tuesday's 0.2 percent dip that left shares selling for $25.84. The stock's gains have run counter to the overall decline of the personal-computer industry -- still HP's main source of revenue -- as well as the PC titan's inability to hold that throne in 2013, according to research reports.

As Whitman nears the second anniversary of her move from the HP board to the lead job in September 2011, HP investors and analysts hope that the worst is behind her. A year ago, HP announced a massive $9.2 billion write-down on its acquisition of EDS; the company followed that up the next quarter by writing down $8.8 billion of the $11 billion it spent on British software firm Autonomy, accusing the company of misrepresenting its value during negotiations.

Since those twin disclosures, HP has been steadily rebuilding: The second-largest tech company in Silicon Valley managed to beat analysts' earnings expectations in the final quarter of calendar-year 2012 and the first full quarter of 2013, despite year-over-year declines, and shares rose by a double-digit percentage the day after both reports.

"I must say that I'm encouraged with where we are," Whitman said during HP's most recent quarterly-earnings conference call, in May. "We've made significant progress. ... You can feel the turnaround taking hold at HP."

Analysts polled by Thomson Reuters expect HP to post profits of 86 cents a share on a non-GAAP basis for its fiscal third quarter on revenues of $27.29 billion, which would reflect a year-over-year decline of 14 percent and 8 percent, respectively. Those analysts are not yelling for investors to sell their stock, however: Of 31 analysts tracked by Thomson Reuters, only 6 suggest selling the stock, with the largest group suggesting investors sit on their shares instead of buying more.

That sentiment has tilted toward even more positive feelings of late, as HP realizes cost savings from a massive round of 29,000 layoffs that began more than a year ago and is expected to continue through October. Wells Fargo Securities analyst Maynard Um reiterated his "Outperform" rating on the stock Tuesday, boasting of potential upside partially "driven by benefits from restructuring," and Morgan Stanley analyst Katy Huberty reported that the cuts have brought slashed HP's costs.

"With cost per employee at the lowest level in five years, new product introductions, a revamped channel program, and improving U.S. enterprise IT demand should begin to drive operating leverage" in the second half of HP's fiscal year, Huberty wrote.

New products that could help balance the company's declines in PCs and printers include its Project Moonshot low-power servers, which Apple (AAPL) is reportedly interested in, and new storage offerings stemming from its acquisition of Fremont's 3Par in 2010.

"We believe it will be a tale of two stories with revenue pressures across a number of segments, but areas of momentum in products such as 3Par, Moonshot (albeit still early) as well as slower service runoff and some stabilization in printing," Um wrote.

Despite the positive beliefs, few are fully sold on HP two years into a turnaround project that Whitman has said will last much longer.

"HP can cut costs and heads but we continue to think it needs ambitious innovation versus managed shrinkage," Evercore Partners analyst Rob Cihra wrote in a note last week, in which he raised HP's price target from $18 to $20. "Low-power Moonshot servers, higher-end printing and software-defined networks all help but none enough to move HP's massive needle."

SV150 market report: S&P breaks losing streak as Netflix, Tesla move higher

The Standard & Poor's 500 index broke its four-day losing streak Tuesday, but Silicon Valley tech stocks trailed as strong gains from Netflix and Tesla were tempered by a slight snag in Apple's resurgent summer.

Netflix hit a two-year high and moved within about 11 percent of its all-time high after announcing yet another exclusive content deal, nabbing first-run flicks from The Weinstein Co., which has won the best-picture Oscar twice in the past three years, with "The Artist" and "The King's Speech." The Los Gatos video-on-demand company gained 5.2 percent to close at $273.29, and also received news of a new option for customers to stream to their TVs, as San Jose-based TiVo announced that its new digital video recorders will have streaming capabilities; TiVo gained 4.9 percent to close at $10.99.

Tesla Motors (TSLA) gained 3.2 percent to $149.58 after the Palo Alto company announced that its Model S all-electric sedan had received the highest crash-test ratings on record from the federal government, including breaking a machine meant to test roof strength. The car, which also matched records in Consumer Reports tests, received five-star ratings in all the National Highway Traffic Safety Administration's safety categories. Intel (INTC) gained 1.1 percent to $22.52 as the Santa Clara chipmaker lobbied for simpler tax rules and led a financing round for a Mountain View startup. Electronic Arts (ERTS) moved 0.7 percent higher to $26.75 after detailing the success of its latest mobile game, "Plants vs. Zombies 2," and Yahoo (YHOO) gained 0.8 percent to $27.12 despite a ComScore report showing Amazon chopping into its lead in Internet video.

Apple stock pulled back 1.3 percent but stayed higher than $500, closing at $501.07. The daily decline for the world's most valuable company follows a month and a half of solid gains and Monday's run-up after reports of certain elements of the firm's upcoming iPhone announcement. Intuit (INTU) dropped 0.4 percent to $63.14 before releasing its quarterly earnings report; the Mountain View software firm dropped in early post-bell trading after announcing a loss of 5 cents a share on revenues of $634 million, but shares turned to a slight gain by 3 p.m. Pacific time. Google (GOOG) held basically even, closing at $865.42 after fully integrating Waze, its $1 billion acquisition from earlier this year, into Google Maps and releasing a new YouTube mobile app.

Up: Netflix, SunPower (SPWRA), Tesla, Facebook, Juniper, Gilead, Intel, Workday, AMD, Yelp, Yahoo, Pandora, Applied Materials, EA

Down: SolarCity, Zynga, Apple, Intuit, NetApp, HP, eBay

The SV150 index of Silicon Valley's largest tech companies: Up 1, or 0.08 percent, to 1,300.7

The tech-heavy Nasdaq composite index: Up 24.50, or 0.68 percent, to 3,616.59

The blue chip Dow Jones industrial average: Down 7.75, or 0.05 percent, to 15,002.99

And the widely watched Standard & Poor's 500 index: Up 6.29, or 0.38 percent, to 1,652.35

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.