MARKET SNAPSHOT: Stocks Mostly Higher, But Dow Dragged Down By IBM
Big Blue accounts for nearly all of blue-chip average decline
U.S. stocks rose on Wednesday, with consumer-discretionary shares leading the session's advance while shares of International Business Machines Corp. were largely responsible for a decline in the Dow industrials.
The Dow Jones Industrial Average fell 55 points, or 0.3%, to 20,468, with IBM by far the biggest drag on the blue-chip average (http://www.marketwatch.com/story/ibms-stock-plunge-cutting-dow-gains-in-half-2017-04-19).
IBM (IBM) shed 4.9% after the tech giant posted weaker-than-expected quarterly sales (http://www.marketwatch.com/story/ibm-quarterly-sales-fall-short-of-expectations-2017-04-18) late Tuesday. It was the biggest one-day drop for the company since June, and the decline took the stock to its weakest level since December.
IBM has an outsize impact because the Dow is price-weighted, meaning the most expensive stocks--rather than the largest companies--have the biggest pull. IBM is the fifth-most influential company in the 30-stock average by this metric, and contributed to a 58-point drag on the average.
"IBM is constantly disappointing, but it's a nonplayer for me," said Wayne Kaufman, chief market analyst at Phoenix Financial Services. "There are a few companies that people look at to read the tea leaves of the market, but IBM isn't one of them anymore."
The S&P 500 rose 2 points, or 0.1%, to 2,344, with consumer-discretionary and health-care stocks leading gainers.
The Nasdaq Composite rose 29 points, or 0.5%, to 5,878, up 0.5%., led higher by shares of Intuitive Surgical Inc. and Facebook Inc.
The day's gains were broad, with seven of the S&P 500's 11 primary sectors higher on the day. Financials, which had been the lead gainer earlier in the session, was only up 0.1% by mid-session. Morgan Stanley(MS) rose 2.2% on the back of better-than-expected earnings (http://www.marketwatch.com/story/morgan-stanley-profit-rises-well-above-views-2017-04-19), which helped offset the weak read out of Goldman Sachs (MS) on Tuesday.
"We're off to a good start with earnings, with three-quarters of companies beating expectations, though it's a small data set so far," said Kaufman. "Financials have been good, with Goldman the only land mine. But we need to continue seeing good earnings in order to spark demand for investors to keep coming in."
Intuitive Surgical (ISRG) shares rallied 6.8% after the surgical robot maker topped Wall Street estimates for the quarter (http://www.marketwatch.com/story/intuitive-surgical-stock-rises-6-after-first-quarter-earnings-beat-2017-04-19-1091914).
Facebook(FB) shares rose 1.3% a day after the social media company announced a new cameras-based augmented reality platform.
BlackRock Inc.(BLK), the world's largest money manager, posted increases in revenue, profit and assets under management (http://www.marketwatch.com/story/blackrock-profit-up-as-investor-exit-active-funds-2017-04-19). Shares fell 1.4%.
Yahoo Inc.(YHOO) was down 0.7% after the internet pioneer posted better-than-anticipated earnings. It also said the planned acquisition of the company by Verizon Communications Inc.(VZ) is expected to close in June (http://www.marketwatch.com/story/yahoo-beats-on-earnings-says-verizon-deal-to-close-in-june-2017-04-18).
Other markets:Oil futures (http://www.marketwatch.com/story/oil-steadies-as-investors-await-eia-inventory-report-2017-04-19) declined 1.6% as gasoline supplies climbed. European stocks were mostly higher, while most Asian markets closed lower (http://www.marketwatch.com/story/china-leads-broad-declines-in-asian-markets-2017-04-18). Gold futures (http://www.marketwatch.com/story/gold-slides-as-dollar-recovers-but-geopolitics-keep-a-floor-under-metals-2017-04-19) lost ground, as a key dollar index gained.
Read:Why the snap U.K. election is a 'game-changer' for the pound (http://www.marketwatch.com/story/heres-why-the-pound-surged-to-10-week-high-after-may-called-snap-uk-election-2017-04-18)
And see:What's a 'snap election' and why does Theresa May want one? (http://www.marketwatch.com/story/whats-a-snap-election-and-why-does-uk-prime-minister-theresa-may-want-one-2017-04-18)
Economic news: Boston Federal Reserve President Eric Rosengren said at Bard College's Levy Economics Institute that he would like the Fed to start shrinking the balance sheet but at such a gradual rate (http://www.marketwatch.com/story/feds-rosengren-wants-to-shrink-balance-sheet-so-slowly-that-rate-hikes-can-continue-2017-04-19) that it doesn't disrupt the central bank's raising of interest rates.
See: Evidence the Fed can shrink its balance sheet without sparking a market tantrum (http://www.marketwatch.com/story/evidence-the-fed-can-shrink-its-balance-sheet-without-sparking-a-market-tantrum-2017-04-19)
Check out:
The Fed is slated to release its Beige Book report on economic conditions at 2 p.m. Eastern.
--Victgor Reklaitis in London contributed to this report.
(END) Dow Jones Newswires
April 19, 2017 13:31 ET (17:31 GMT)