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 Trading was volatile, with the S&P fluctuating between positive and
negative territory throughout the session, while the Dow moved
between modest and solid losses and the Nasdaq swung between modest
and strong gains.
The S&P materials index <.SPLRCM> rose 0.6 percent as one of the
best performing major S&P indexes, led by a 6.6 percent gain in Dow
Chemical <DOW.N> to $45.93. Activist investor and hedge fund manager
Daniel Loeb has taken a stake in the company and wants it to spin
off its petrochemical arm.
In addition, Alcoa Inc <AA.N> jumped 6.8 percent to $12.13 following
an upgrade to "overweight" from JPMorgan. The firm also lifted its
price target on the aluminum company to $15 from $9.
Energy stocks <.SPNY>, another group with some correlation to the
pace of economic growth, advanced 0.5 percent.
"We still think economically-sensitive stocks have room to run...
Those have the potential to be long-term winners," said Jeff
Mortimer, director of investment strategy for BNY Mellon Wealth
Management in Boston.
The Dow fell as Travelers Cos Inc <TRV.N>, Verizon Communications
Inc <VZ.N> and Johnson & Johnson <JNJ.N> — all bellwethers for their
sectors — tumbled following results.
Travelers fell 1.7 percent to $85 after posting a profit that beat
expectations, though investors worried about the insurance
provider's margins. Verizon lost 1.3 percent to $47.70, while J&J
dropped 1.1 percent to $94.03 after it gave a forecast at the low
end of analyst expectations.
According to Thomson Reuters data, earnings for the fourth quarter
are expected to grow 7 percent over the prior year. Of the 61
companies in the benchmark S&P index that have reported so far,
about 56 percent topped analyst expectations, below the long-term
average of 63 percent. About 71 percent have topped revenue
forecasts, above the long-term average of 61 percent.
The Dow Jones industrial average <.DJI> was down 44.12 points, or
0.27 percent, at 16,414.44. The Standard & Poor's 500 Index <.SPX>
was up 5.10 points, or 0.28 percent, at 1,843.80. The Nasdaq
Composite Index <.IXIC> was up 28.18 points, or 0.67 percent, at
4,225.76.
As the Federal Reserve has embarked on its plan to reduce stimulus,
investors will closely monitor corporate profits for signs of
growth. About eight companies have issued negative outlooks for
every positive one, which would mark the lowest ratio on record
should it continue.
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"Results are running light, and negative announcements have been off
the hook with very high levels of negative guidance," said Mortimer,
who helps oversee about $185 billion in client assets. "The market
pays a premium for growth, and the stocks that have rallied and then
disappointed are susceptible to large drops almost immediately."
International Business Machines Corp <IBM.N> fell 3.4 percent to
$182.01 in after-hours trading. The Dow component reported adjusted
fourth-quarter earnings that beat expectations, but revenue was
below consensus.
Texas Instruments Inc <TXN.O> shares fell 1.3 percent to $43.30
after the bell despite the company reporting fourth-quarter revenue
that beat expectations. Advanced Micro Devices <AMD.N> slumped 11.5
percent to $3.69 after the bell.
Cree Inc <CREE.O> rose 4.2 percent after the market closed after
posting second-quarter revenue that topped expectations.
U.S.-listed shares of BlackBerry Ltd <BBRY.O> were the top boost to
the Nasdaq 100 <.NDX>, jumping 9.4 percent to $9.93 as short-sellers
bailed out of the smartphone maker. The stock is up about 33 percent
in 2014.
Delta Air Lines Inc <DAL.N> rose 3.3 percent to $32.08 after it
reported a higher-than-expected fourth-quarter profit, aided by
lower fuel costs.
About 63 percent of companies that trade on the New York Stock
Exchange closed higher while 59 percent of Nasdaq-listed names ended
in positive territory. About 6.78 billion shares traded on all U.S.
platforms, according to BATS exchange data.
(Editing by Bernadette Baum and Nick
Zieminski)
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