Corporate earnings pushed U.S. stocks mostly higher on Thursday, but it wasn’t an easy ride up.
The stock market appeared set in the morning for its fourth consecutive positive open but immediately turned negative as investors sold shares in Google and IBM. The market heavyweights reported disappointing earnings late Wednesday. Earnings from toy maker Mattel and insurer UnitedHealth also dragged down stocks.
But by midmorning, the market started to push higher as traders cheered upbeat results from Morgan Stanley, General Electric and PepsiCo.
The Standard & Poor’s 500 index rose two points, or 0.1 percent, to close at 1,864.85. Seven of the 10 industry sectors in the S&P 500 gained, led by energy stocks. The Nasdaq added nine points, or 0.2 percent, to finish at 4,095.52. The Dow Jones industrial average, however, fell 16 points, or 0.1 percent, to close at 16,408.54, hurt by the big drop in IBM.
U.S. stock markets will be closed today in observance of Good Friday.
Thursday’s trading reflected buying and selling on earnings news, rather than a broader market theme taking hold, said Paul Mangus, head of equity research and strategy for Wells Fargo Private Bank.
“Going into this quarter, expectations are low, so if you disappoint on low expectations you’re likely to be penalized,” he said. “However, they also present the opportunity for some significant beats because the estimates are that low.”
Despite the big-name decliners, the latest wave of quarterly results has been mostly positive, said John Fox, director of research at Fenimore Asset Management.
“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 changes that.”
Homebuilders, automakers and consumer discretionary companies should provide a better read on whether consumer demand has rebounded from winter’s deep chill.
“The companies that would be most impacted by that have yet to report,” Mangus said.