Stock Market News for January 23, 2014 – Zacks Investment Research
The Dow ended in negative territory for the second-straight day while the S&P 500 and Nasdaq managed positive closes. As expected, earnings numbers were the dominating factor behind markets’ movement and IBM’s lower-than-expected revenues dragged the blue-chip index lower. Separately, positive numbers from Norfolk Southern and TE Connectivity boosted S&P 500. The tech-laden Nasdaq hit its highest level since 2000.
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The Dow Jones Industrial Average dropped 0.3% to close at 16,373.34. The Standard & Poor 500 (S&P 500) edged up 0.1% to finish yesterday’s trading session at 1,844.86. The tech-laden Nasdaq Composite Index closed at 4,243, reflecting gains of 0.4%. The fear-gauge CBOE Volatility Index (VIX) dropped 0.2% to settle at 12.84. Composite volume on the New York Stock Exchange was 3.38 billion. Advancers outran the decliners as for 63% stocks that gained, 34% stocks declined.
The Dow dropped yesterday largely due to International Business Machines Corporation’s (IBM) dismal revenues. IBM reported fourth-quarter revenues of $27.70 billion that lagged the Street estimates. Revenues were also down 5.5% from the year-ago quarter. On constant currency (cc) basis, revenues declined 3.0% from the year-ago quarter.
Shares of IBM slumped 3.3%. It is the second-highest priced component in the Dow and thus the decline dragged the broader index along with it to the red zone. Separately, Coach, Inc. (NYSE:COH) tanked 6% after an earnings miss. It reported earnings of $1.06 a share, well short of the consensus estimate of $1.11. Moreover, earnings were down 13.8% year on year.
Coach was the biggest loser among the S&P 500 stocks, but the index still managed a finish in the green primarily aided by Norfolk Southern Corporation (NYSE:NSC). Shares of Norfolk jumped 4.8% after its fourth quarter profit jumped 24%, which also outpaced Street estimates. United Technologies Corp. (NYSE:UTX) too reported better-than-expected earnings and its shares inched up almost a percent.
The day lacked any other major action and there was no key economic data that could move the markets. Benchmarks traded in a narrow range as investors kept searching for clarity on the earnings front.
Meanwhile, Nasdaq climbed to its best level since July 17, 2000. The tech-heavy index has ended in the green in five of the last six trading sessions. Talking of individual benchmarks, the Dow seems to be out of favor this week. The two trading sessions of this week so far saw the Dow ending up on the losing side, while others gained. The Dow is down 0.5% so far this week. The S&P 500 and Nasdaq are up 0.3% and 1.1%, respectively.
The Dow’s finish in the red on both these days was due to earnings results and forecasts. Dow components Verizon Communications Inc. (NYSE:VZ), The Travelers Companies, Inc. (NYSE:TRV) and Johnson & Johnson (NYSE:JNJ) had dragged the blue-chip index lower on Tuesday.
The Dow’s dismal run this week is in sharp contrast to its 0.1% weekly rise last week, which was also the first weekly gain of the year. In fact, the Dow was the lone weekly gainer last week as the S&P 500 and Nasdaq closed the week with losses of 0.2% and 0.6%, respectively. However, this week the Dow’s fortunes have taken a completely different turn.
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Stock Market News for January 23, 2014 – Zacks Investment Research
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