November 22, 2017

Wall Street Rebounds, Lifted by Technology Earnings

Strong earnings from two technology giants helped the stock market recover some of its losses on Friday, a positive end to Wall Street’s worst week in five months.

Microsoft and Google both beat earnings expectations this week, yields of government bonds ticked up, and copper, a crucial industrial metal, continued its fall, losing 2 percent.

Microsoft shares gained 3.39 percent, to $29.76, pushing the Dow Jones industrial average higher. It reported earnings late Thursday that beat analysts’ forecasts and showed solid results from its Office, software tools and Xbox divisions. Google’s stock climbed 4.43 percent, to $799.87. It raised its prices for ads distributed to smartphones and tablet computers.

The Standard Poor’s 500-stock index rose 13.64 points, to 1,555.25, up 0.88 percent. The Dow gained 0.07 percent, or 10.37 points, to 14,547.51.

The Dow spent most of the day down, pulled lower by disappointing results from I.B.M., whose shares slipped 8.28 percent, to an even $190. The company’s earnings fell short of forecasts for the first time since 2005.

The Nasdaq composite index gained 39.70 points, to 3,206.06, up 1.25 percent.

Traders, like everyone else, were following the news out of Boston, where police were hunting for one of two brothers suspected to be behind the Boston Marathon bombings on Monday. But the news had no impact on markets, traders said.

The slight gains on Friday could not overcome a tough week for the market, when both the S. P. 500 and the Dow lost 2.1 percent. That is their biggest weekly drop since last November.

“Compared to the rest of the week, it looks like we’re going to slide into the weekend on a quiet note,” said Jim Baird, partner and chief investment officer for Plante Moran Financial Advisors.

By many measures, the markets have endured a rough five days. News that economic growth had slowed in China set off a slide in commodity prices on Monday, leading the stock market to its worst day of the year. Gold dropped below $1,400 an ounce for the first time in two years.

The stock market bounced back the next day, then fell again on Wednesday, its third-worst day this year.

Most big corporations have beaten analysts’ low expectations for first-quarter profits. Of the 104 companies that turned in results through Friday morning, 70 have topped forecasts, according to SP Capital IQ.

Analysts estimate that earnings for companies in the S. P. 500 rose just 2 percent over the previous year, a slowdown from the 7.7 percent rise in the fourth quarter of 2012.

Next week will be another big week for earnings as 10 members of the Dow and 181 companies in the S. P. 500 report results.

Interest rates gained. The yield on the 10-year Treasury note climbed to 1.71 percent, up from 1.69 percent late Thursday, while its price fell 6/32 to 102 21/32.

Traders cautiously returned to buying certain major commodities on Friday, including gold and oil, after big sell-offs early this week. But copper continued its fall, losing 2 percent to $3.16 a pound.

Rex Macey, the chief investment officer at the Wilmington Trust Investment Advisors, said markets were bound to encounter turbulence as long as the economy advanced at a slow pace.

Forecasts say the United States economy will expand 2 percent this year.

Joseph Tanious, a global market strategist at J. P. Morgan Funds, said: “We’re going to have a stronger 2013 than 2012.”

He added, “But the recovery is going to be much more bumpy than people thought.”

This article has been revised to reflect the following correction:

Correction: April 19, 2013

Because of an editing error, an earlier version of this article misstated the day’s change for General Electric stock. It was down 4 percent, not 0.9 percent.

Article source: http://www.nytimes.com/2013/04/20/business/daily-stock-market-activity.html?partner=rss&emc=rss

Unemployment Data Signals a Softening Economy

Underscoring the softening growth outlook, another report on Thursday showed that a gauge of future economic activity fell in March for the first time in seven months. These reports are the latest to indicate a step back in the economy after a brisk start to the year as tighter fiscal policy began to set in.

“The evidence is mounting that the economy lost momentum in March and that has carried to April,” said Ryan Sweet, a senior economist at Moody’s Analytics.

Economic reports for January and February have suggested that growth accelerated in the first quarter after activity almost stalled in the final three months of 2012.

But in a replay of the previous two years, the economy appears to have hit a speed bump at the end of the quarter, with data like employment, retail sales and manufacturing weakening significantly in March.

Initial claims for state unemployment benefits rose 4,000 to a seasonally adjusted 352,000, the Labor Department said. The four-week moving average for new claims, a better measure of labor market trends, rose 2,750, to 361,250.

While claims rose last week, they were still at levels that economists normally associate with average monthly job gains of more than 150,000. That helped ease concerns of a deterioration in labor market conditions after employment had its smallest increase in nine months in March. Employers added 88,000 workers to their payrolls last month after a solid 268,000 increase in February.

“Labor market conditions still appear to be grinding forward, but pushing against the weight of a slowing economy and subdued confidence,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.

In separate report, the Federal Reserve Bank of Philadelphia said its business activity index fell to 1.3 in April from a reading of 2.0 in March. A reading above zero indicates expansion in the region’s manufacturing.

Details of the survey, which covers factories in eastern Pennsylvania, southern New Jersey and Delaware, were weak. Measures of factory employment and new orders contracted.

Inventories fell sharply after being flat in March, an indication that stock accumulation will not contribute to growth in the second quarter. Inventories are expected to have significantly increased output in the first three months of 2013.

“This report has to raise some concerns that the nation’s manufacturing sector may be starting to feel the impact of the higher taxes on households and the cutbacks in government spending,” said Joel Naroff, chief economist at Naroff Economic Advisors.

A third report supported views that the economy was again headed for a soft patch this spring. The Conference Board said its index of leading economic indicators slipped 0.1 percent to 94.7 last month, the first drop since August.

The data provides ammunition for the Federal Reserve to maintain its aggressive policy easing, despite a rift among policy makers on continuing asset purchases.

“Growth is continuing but a spring slowdown looks to be in place. The numbers support the view of many at the Fed that the end of the liquidity surge is nowhere in sight,” Mr. Naroff said.

Article source: http://www.nytimes.com/2013/04/19/business/economy/unemployment-data-signals-a-softening-economy.html?partner=rss&emc=rss