Stocks finished mixed Thursday amid a barrage of earnings and economic news. Intel (INTC) and Yahoo! (YHOO) lost ground as both failed to impress investors with first-quarter earnings guidance.
The Dow Jones industrial average was up 15.4 points, or 0.15%, to 10,553.85. The broader Standard & Poor's 500 index added 1.53 points, or 0.14%, to 1,132.05. The tech-heavy Nasdaq composite index lost 2.05 points, or 0.1%, to 2,109.08.
"While earnings reports have been pretty strong so far, investors are a little frustrated by the lack of increased guidance by some of the major tech firms," says Standard & Poor's MarketScope.
Companies reporting results Friday include General Electric (GE), Abbott Laboratories (ABT), and KeyCorp (KEY).
One sector pushing higher Thursday was financials, on merger news. JP Morgan Chase (JPM) says it will acquire Bank One (ONE) in a stock deal valued at about $58 billion (1.32 JPM shares will be exchanged for each ONE share). Bank One shares jumped on the news, and sparked speculation for more deals in the sector.
On the weak side were gold stocks as February gold futures plunged $13 on the rise in the U.S. dollar against the euro. Wireless stocks were also under pressure after Bear Stearns downgraded Nextel Communications (NXTL) to peer perform from outperform on valuation. There was probably some profit taking going on as the group rallied yesterday on news that Cingular and AT&T Wireless (AWE) are in merger talks again, notes Standard & Poor's MarketScope
On the economic front, the January Philadelphia Fed Index, a manufacturing gauge, rose to 38.8 from 30.3 last month, stronger than expected.
December retail sales rose 0.5%, vs. Nov.'s 1.2% rise. Excluding autos, December sales rose 0.1%. The report was weaker than expected.
The consumer price index in December rose 0.2%, vs. November's 0.2% decline, in line with estimates. The core CPI, which excludes food and energy prices, rose 0.1%.
Initial jobless claims for the week ended Jan. 10 fell 11,000 to 343,000.
Earnings season got into high gear on Wednesday, with releases from widely-followed tech companies such as Intel (INTC), Apple Computer (AAPL), and Yahoo! (YHOO). All three stocks were lower Thursday.
Intel reported earnings per share of 33 cents, above the consensus estimate of 25 cents. Intel says the EPS figure includes a 9-cent goodwill impairment charge and a 9-cent tax benefit on divestitures. Revenue rose 22% from a year earlier to $8.74 billion, above the $8.65 billion forecast. The chip giant expects revenue in the first quarter to be between $7.9 billion and $8.5 billion.
Yahoo announced earnings of 11 cents per share, matching the consensus estimate, up from 8 cents the year before.
Apple Computer reported fiscal first-quarter earnings of 16 cents per share, excluding a 1-cent gain, beating the consensus estimate by 2 cents. Revenue rose 36.3% from a year ago to $2.01 billion, above the estimate. The company sees second-quarter EPS of 8 cents to 10 cents on revenue of about $1.8 billion.
IBM Corp.(IBM) rose after the tech giant reported fourth-quarter EPS from continuing operations of $1.56, above the $1.50 consensus estimate and up from $1.11 a year ago, on a 9% revenue rise.
Other large companies reporting results Thursday were financials Bank of America (BAC), FleetBoston Financial (FBF), and Wachovia (WB). In tech, Sun Microsystems (SUNW) and Juniper Networks (JNPR) were reporting earnings.
Merrill Lynch (MER) shares rose after the company expects to report record 2003 net earnings. It notes previous record full-year net earnings were $3.784 billion, reported in 2000.
Reuters Group (RTRSY) shares were higher after the company reports subscriber cancellations in fourth-quarter showed improvement from the third quarter. It expects the decline in recurring revenue in the first quarter of 2004 will be 9% or slightly better on underlying basis vs. a year ago.
RadioShack (RSH) rallied after the electronics retailer says it sees fourth-quarter EPS exceeding the high end of its previous 67 cents to 70 cents guidance range.
Lucent Technology (LU) rose after Lehman Brothers upgraded to overweight from equal-weight.
Treasuries ended mixed, with the long end moving higher in price and the shorter-dated securities falling. Benign inflation data was offset by reports reinforcing the economic rebound, notes Informa/MMS, so the Treasury curve contracted, amid profit taking. The yield on the 10-year note fell to 3.965%.
Economic reports coming Friday include the University of Michigan consumer sentiment survey, business inventories, and industrial production and capacity utilization.
European stock markets finished mixed. London's Financial Times-Stock Exchange 100 index fell 5.3 points, or 0.12%, to 4,456.1 as Britain's construction orders rose 6% from September to November.
In Paris, the CAC 40 added 14.42 points, or 0.4%, to 3,626.97 as the Bank of France sees economic growth accelerating. Germany's DAX index rose 13.54 points, or 0.33%, to 4,068.75 after final figures show German GDP fell 0.1% last year, the first decline since 1993, mostly due to first half recession.
Asian markets finished lower Thursday. In Japan, the Nikkei 225 index fell 197.85 points, or 1.82%, to 10,665.15. Traders in Tokyo blamed the strengthening Japanese yen as well as Intel's overnight forecast for pulling the bourses down. Intel's forecast for sales and capital spending missed some analysts' estimates.
In Hong Kong, the Hang Seng index lost 71.07 points, or 0.53%, to 13,249.81.