September 22, 2023

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.

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