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IBM earnings dampen sentiment at Wall Street

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Capital Market
Last Updated : Apr 22 2013 | 11:00 AM IST

US stocks ended with strong losses for the week that ended on 19 April, 2013. Indices lost between 2% to 3% for the week. But stocks gained on the last trading day of the week ie Friday, 19 April. But in spite of Friday's gains, it proved to be the worst week in months for equities. The S&P 500 witnessed its biggest such hit since November 2012. The Dow industrials suffered its worst week since June, and the Nasdaq Composite witnessed the worst week since October.

For the week, the Dow ended lower by 317.55 points (2.1%) at 14,547.51. Nasdaq ended lower by 88.89 points (2.7%) at 3,206.06. S&P 500 ended lower by 33.6 points (2.1%) at 1,555.25.

On Monday, equities sold off steadily throughout the day, and the S&P 500 lost 2.3%, registering its biggest one-day drop of the year. The major averages were pressured from the opening bell as global growth concerns returned to the forefront. In China, first quarter GDP rose 7.7%, which was below the expected growth of 8.0%. The disappointing report added to the weakness of the commodity complex, which saw an extension of last week's selling. Gold miners endured a rough session a 9.5% plunge in gold to $1356.80. Meanwhile, silver tumbled 13.0% to $22.90.

Tuesday brought some relief as the S&P 500 climbed 1.4%. While the conomically-sensitive materials space was able to rebound and end atop the leaderboard, the defensively-geared consumer staples were not far behind. Staple stocks received some support from Coca-Cola after the beverage giant narrowly beat the earnings estimate. A defensive bid also buoyed the health care sector where Johnson & Johnson gained 2.1% after beating on earnings.

Sellers reemerged during Wednesday's session as the S&P 500 tumbled 1.4%. Technology stocks felt the brunt of the drop. Apple dipped below $400 for the first time since December 2011, and settled lower by 5.5%.

Thursday saw a continuation of Wednesday's selling. Cyclical sectors were under pressure with technology stocks once again finishing among the laggards. Elsewhere, the cyclical discretionary sector also finished in the red as homebuilders slumped.

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On Friday, 19 April 2013, U.S. stocks ended higher on Friday, trimming weekly losses, as blue-chip tech giants IBM and Microsoft set a contrasting tone for earnings.

While the Dow spent the entire day in negative territory, the S&P 500 climbed steadily as some of the biggest laggards of the week appeared among today's leaders. With the market rebounding broadly, seven of 10 sectors ended with gains of at least 1.0%. Leadership was mixed as cyclical and defensive groups displayed strength.

The Dow Jones Industrial Average added 10.37 points, or 0.1%, 14,547.51. The technology-laden Nasdaq Composite advanced 39.69 points, or 1.3%, to 3,206.06, a day after robust earnings from Microsoft and Google with the latter late Thursday reporting a double-digit increase in net revenue from its core Internet business. The S&P 500 index added 13.64 points, or 0.9%, to 1,555.25, with telecommunications and consumer staples leading gains and technology and energy hit among its 10 major sectors.

IBM was the biggest drag on the Dow, falling 8.3% a day after the computer-services provider missed Wall Street forecasts for quarterly revenue and earnings.

Google and Microsoft kept the sector from registering further losses after the two beat on earnings.

Among other major stocks under focus, General Electric fell 4.1% after the jet-engine manufacturer reported profit in line with estimates. McDonald's slid nearly 2% after the fast-food chain reported first-quarter profit that missed estimates. Boeing shares gained 2.1%, catching a mid-session updraft after the Federal Aviation Administration said it approved the jetmaker's changes to the 787 battery system.

Crude-oil prices ended little higher on Friday, 19 April 2013 at Nymex. Prices ended higher as traders mulled the prospects for an output cut from the Organization of the Petroleum Exporting Countries after a recent slump in prices. Light and sweet crude for May ended higher by $0.28 (0.3%) at $88.01 a barrel on the New York Mercantile Exchange on Friday. Prices shed 3.6% for the week.

For every share falling nearly three rose on the New York Stock Exchange, where 911 million shares traded. Composite volume surpassed 3.5 billion.

Indian ADRs ended mixed on Friday. In the IT space, Infosys was up 1.1% and Wipro was down 4.1%. In the Banking space, HDFC Bank was up 1.7% and ICICI Bank was up 0.8%. In the Telecom space, Tata Communication was unchanged. In other space, Tata Motors was up 1.9%, Dr Reddys was up 0.83% and Sterlite was up 0.2%.

For the year, the Dow, Nasdaq and S&P 500 are trading higher by 11%, 6.2% and 9% respectively. On Monday, March existing home sales will be reported at 10:00 ET.

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First Published: Apr 22 2013 | 9:33 AM IST

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