IBM Leads Dow Rally Early Wednesday 01/23 09:26
Stocks are rising Wednesday morning following a crop of strong
fourth-quarter earnings reports from companies including IBM, consumer products
maker Proctor & Gamble, and manufacturer United Technologies.
NEW YORK (AP) -- Stocks are rising Wednesday morning following a crop of
strong fourth-quarter earnings reports from companies including IBM, consumer
products maker Proctor & Gamble, and manufacturer United Technologies. That's
helping indexes recover a chunk of their losses from the day before. Bond
prices turned lower and yields rose.
KEEPING SCORE: The S&P 500 index gained 18 points, or 0.7 percent, to 2,651
as of 10 a.m. Eastern time. The Dow Jones Industrial Average jumped 269 points,
or 1.1 percent, to 24,673. The Nasdaq composite rose 58 points, or 0.8 percent,
to 7,078. The Russell 2000 index of smaller-company stocks added 10 points, or
0.7 percent, to 1,467.
EARN, BABY, EARN: IBM rocketed toward its biggest gain in 10 years after its
fourth-quarter results surpassed Wall Street estimates. Investors were also
pleased with the company's forecasts for 2019. BMO Research analyst Keith
Bachman said critical operations including IBM's business and technology
services divisions did well in the quarter. The stock jumped 9.2 percent to
$133.95, which put IBM on track for its largest gain since January 2009. The
stock sank 25 percent in 2018.
Tide, Bounty and Crest maker Procter & Gamble rallied 6 percent to $95.89
after its profit came out ahead of expectations and its sales were well above
analyst forecasts as well. The company said its annual profit and sales could
be slightly stronger than it previously expected.
Elevator and jet engine maker United Technologies rose 6.2 percent to $118
following its report, while media company Comcast jumped 6.4 percent to $37.21
after it picked up more internet subscribers and got a revenue boost from Sky,
its big bet on European TV.
U.S. company profits got a big boost in 2018 after the passage of the
Republican-backed corporate tax cut. While the law lowered corporate tax rates
permanently, it contributed to a one-time increase in profit growth. A period
of strong global economic growth also helped company profits last year,
although that has been fading.
BONDS: Bond prices fell. The yield on the 10-year Treasury note rose to 2.76
percent from 2.73 percent.
U.S-CHINA RELATIONS: White House economic adviser Larry Kudlow denied
reports by media outlets including the Financial Times and CNBC saying the U.S.
had turned down an offer by Chinese trade officials to meet in Washington this
week, due to a lack of progress on issues such as protection of intellectual
property. Kudlow said both sides are working toward the higher-level talks. The
reports, citing unnamed sources close to the matter, said the discussions were
meant to pave the way for meetings between Chinese Vice Premier Liu He and U.S.
Trade Representative Robert Lighthizer next week.
ENERGY: U.S. crude oil slipped 0.1 percent to $52.94 per barrel in New York.
Brent crude, used to price international oils, gained 0.3 percent to $61.71 per
barrel in London.
OVERSEAS: France's CAC 40 gained 0.4 percent and the German DAX rose 0.2
percent. Britain's FTSE 100 lost 0.5 percent.
Japan's Nikkei 225 index shed 0.1 percent after the Bank of Japan kept its
short and long term interest rates intact as expected, but lowered its
inflation forecasts. South Korea's Kospi rose 0.5 percent and Hong Kong's Hang
Seng was almost flat.