Stocks Lower After Google,IBM Earnings 04/17 12:38
Stocks edged lower in midday trading on Thursday as investors digested a
crop of mixed company earnings. Among the stocks weighing down the market were
Google, IBM and insurers UnitedHealth and WellPoint. The decline came after
three days of broad market gains.
(AP) -- Stocks edged lower in midday trading on Thursday as investors
digested a crop of mixed company earnings. Among the stocks weighing down the
market were Google, IBM and insurers UnitedHealth and WellPoint. The decline
came after three days of broad market gains.
KEEPING SCORE: The Standard & Poor's 500 index was little changed at 1,861
as of noon Eastern Time. The Dow Jones industrial average fell 25 points, or
0.2 percent, to 16,399. The Nasdaq composite was flat at 4,085. U.S. markets
will be closed for Good Friday.
EARNINGS, THE GOOD: General Electric described the economic situation as
"positive" and said its industrial division was doing well. PepsiCo reported
higher income as the company slashed costs and sold more snacks around the
world. GE gained 62 cents, or 2.4 percent, to $26.73, while PepsiCo added 39
cents to $85.16.
Goldman Sachs and Morgan Stanley each reported higher income than financial
analysts had forecast. Goldman rose 96 cents, or 0.6 percent, to $158.18.
Morgan Stanley added $1.09, or 3.6 percent, to $30.98.
EARNINGS, THE NOT SO GOOD: Google and IBM each posted steep declines after
reporting results late Thursday that disappointed investors. Google lost
$20.60, or 3.7 percent, to $543.22 and IBM fell $6.82, or 3.5 percent, to
$189.47. Mattel fell 36 cents, or 1 percent, to $37.52 after the toy maker said
weak sales of Barbie dolls and markdowns to clear out excess inventory left
over from a sluggish holiday season led to an unexpected loss in the first
three months of the year.
UNHEALTHY RESULTS: Several large health insurance stocks fell after
UnitedHealth Group said its income slid 8 percent in the first quarter as fees
and funding cuts from the health care overhaul dented the company's
performance. UnitedHealth shed $2.90, or 3.7 percent, to $75.29. WellPoint slid
$4.14, or 4.3 percent to $91.48, while Humana fell $3.30, or 3 percent to
$105.50. Aetna dropped $2.17, or 3.1 percent to $67.70.
TAKEAWAY: Despite Google, UnitedHealth and other high-profile stocks trading
lower on earnings Thursday, the latest wave of quarterly financial results has
been positive, said John Fox, director of research at Fenimore Asset Management.
"Those are individual names. The overall read across five or 10 or 15
earnings reports is positive," Fox said, noting that many companies have
reaffirmed their earnings forecasts for the year. "The fundamental
underpinnings are good, and I'm not hearing anything from management that
THE ECONOMY: The number of people seeking U.S. unemployment benefits last
week rose 2,000 to 304,000. That was less than analysts were expecting and a
sign that layoffs aren't increasing rapidly. The number of weekly claims
continues to be near pre-recession levels despite the slight increase.
BOND TRADING: Bond prices fell. The yield on the 10-year Treasury note rose
to 2.70 percent after reaching 2.63 percent late Wednesday.