Earnings Reports Halt Stock Rally
Disappointing earnings reports pushed blue-chip stocks lower on Wednesday, but continued strength in technology issues nudged broader market indexes higher.
The Dow Jones industrial average declined 7.39 points to 4,707.06. The blue-chip index changed direction after two days of strong gains that had given investors some hope that last week’s 67.27-point loss was an anomaly.
Despite the loss in the Dow, the market’s tone was upbeat.
“There’s such strong momentum in the market, it’s not easy to unravel so quickly,” said Steven Goldman, market strategist at Weeden & Co. “We’ll hit these little air pockets, but the market should go back up and make new highs.”
Advancing issues led decliners by 6 to 5 on the New York Stock Exchange. Big Board volume was heavy at 393.47 million shares as of 4 p.m., up from 373.16 million on Tuesday.
Blue-chip stocks also came under pressure from the bond market. The 30-year Treasury was off nearly 1 point late in the session, even after a reasonably successful Treasury auction of 5-year notes.
Some of the stocks that moved substantially Wednesday:
Minnesota Mining and Manufacturing fell 3-1/2 to 56.
Second-quarter net earnings were 84 cents per share, up from 81 cents a year ago but significantly below analysts’ estimates of 93 cents per share.
DuPont fell 2-5/8 to 68-1/4.
DuPont reported that its second-quarter net earnings were $1.70 per share, up from $1.16 per share but below analysts’ expectations of $1.76.
Student Loan Marketing Association rose 2-1/2 to 52-3/4.
Morgan Stanley upgraded the stock to “outperform” from “neutral,” saying it was unlikely that current attempts to dismantle the government’s direct-lending program would succeed.
IBM rose 5/8 to 109.
The computer maker Tuesday authorized another $2.5 billion stock repurchase plan after already spending almost $3 billion so far this year.
Oracle rose 2 to 42-1/4.
Apple fell 3/8 to 45-3/8.
Microsoft fell 3/8 to 96.
Oracle, Apple and IBM plan to jointly market Oracle’s new Power Objects software in a bid to halt Microsoft’s domination of the market.
Amgen rose 4-3/8 to 84-1/4.
The company reported that it had acquired a hormone earlier this year that significantly reduced weight in severely obese mice.
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