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Wall St gain despite Intel, IBM earnings

Oct 18 2012 07:49

New York - US stocks fought off early selling pressure linked to disappointing quarterly results from IBM and Intel to close broadly higher Wednesday, extending two days of solid gains.

Strong data on new home building helped buoy stocks with hopes that the housing sector was beginning to revive.

The broad-based S&P 500 closed up 5.99 points at 1,460.91, while the tech-rich Nasdaq added 2.95 at 3,104.12.

The narrower Dow Jones Industrial Average of 30 blue chips touched into the black only late in trade, gaining 5.22 points at 13,557.00.

News that housing starts leaped 15.0% in September from August to an annual rate of 872 000, the strongest pace since July 2008, helped put a floor under the trade.

The Dow was held back by share price drops at Intel, IBM and UnitedHealth Group after their third-quarter financial results.

Reporting after trade closed Tuesday, IBM (-4.9%) revenues fell more than expected due to a sharp drop in hardware sales, and the company took a hit on shifts in the foreign exchange market.

Intel (-2.5%) said it was cutting back chip output due to slow computer sales and lowered forecasts of tablet sales.

UnitedHealth fell 1.6% despite a strong earnings report on Tuesday after it announced a $2.5bn debt issue to finance its purchase of 90% of Brazilian health provider Amil Participacoes.

Bank of America was down 0.2% after reporting a sharp fall in profits in the third quarter due to accounting adjustments and legal costs.

Earnings per share came in at a fraction of a penny before paying preferred dividends, better than the loss expected by analysts, but down from 56 cents a year earlier.

Citigroup pushed 3.2% higher a day after chief executive Vikram Pandit abruptly resigned as reports described a board that was no longer satisfied with his performance.

Trade was also busy in real estate investment trust HCP, losing 2.7% after reporting a 4.8% drop in revenue, mainly due to a fall in rental income.

US bond prices fell. The 10-year Treasury yield rose to 1.81% from 1.72% on Tuesday, while the 30-year rose to 2.99% from 2.91%.

Bond prices move inversely to yields.

wall street  |  markets



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