Stocks rose Monday adding to Friday’s rally as investors shake off last week’s volatile trading.
The Standard & Poor’s 500-stock index was up 17 points, or 0.9% to 1904 and the Nasdaq composite index climbed 58 points, 1.4% to 4316. The S&P 500 and Nasdaq were higher for a third straight day.
The Dow Jones industrial average lagged behind but turned positive in the last half hour of trading as investors shook off a big profit miss from IBM. The Dow rose 20 points, or 0.1%, to 16,400 after being down almost 120 points earlier in the session.
U.S. markets are coming off another wild week of trading, in which the Dow saw its most volatile period since 2011.
But Wall Street got some good news over the weekend when fears surrounding the Ebola virus dissipated as no new cases were reported. The Dow rallied 263 points Friday to end a roller coaster week on an up note. Still, the Dow finished the week down 1% and starts the week 5.2% below its Sept. 19 record high.
Investor hopes for solid earnings news to power the market higher have been temporarily dashed by IBM’s weak quarterly earnings report. Missing expectations by a wide margin, IBM saw its shares fall more than 7% to $168.81.
The Dow is a price-weighted index, which means high-priced stocks like IBM have a bigger impact on the index’s price.
One Wall Street firm says IBM’s earnings miss is not a sign the U.S. economy is losing steam, nor is it an accurate gauge of how third-quarter earnings season is going so far.
Even though IBM fell well short on earnings per share ($3.68 versus $4.32 expected) and revenues ($22.4 billion versus $23.4 billion expected), “we would caution reading too much about the broader economy on this news,” Paul Hickey, co-founder of Bespoke Investment Group told clients in an early-morning research note.
Source: USA Today | Adam Shell