Wall Street ends little
changed; Microsoft hits record
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[October 22, 2016]
By Chuck Mikolajczak
NEW YORK (Reuters) - The S&P 500 and the
Dow were little changed and the Nasdaq advanced on Friday as a record
day for Microsoft and earnings from McDonald's helped offset a fall in
energy and healthcare shares.
General Electric <GE.N>, often seen as an economic bellwether, weighed
on the market as the industrial conglomerate's posted results that
topped expectations but cut its full-year revenue target to send shares
down 0.9 percent after it touched an 8-month low of $28.33.
A stronger dollar <.DXY>, which touched its highest level since early
February, also pulled on sentiment as it could dent the earnings of
large multinationals.
"The dollar is getting stronger, that is going to have a negative impact
energy prices, that is going to have a negative impact on corporate
earnings, at least potentially," said Phil Orlando, chief equity market
strategist at Federated Investors, in New York.
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The energy index <.SPNY> was off 0.7 percent, while health <.SPXHC>
declined 0.9 percent. Johnson & Johnson <JNJ.N and Merck <MRK.N>, were
both down 1.2 percent, and among the biggest drags on the healthcare
sector. Schlumberger <SLB.N>, the world's No. 1 oilfield services
provider, weighed on the energy index as it lost 3 percent after its
quarterly results.
But gains in Microsoft <MSFT.O> and McDonald's <MCD.N> on the back of
their strong quarterly reports helped keep losses in check.
"Earnings, frankly have started out little better than I thought they
would, and a little better than the consensus thought they would. You
had a couple of good companies like Microsoft, which is skewing things
positively," said Orlando.
Microsoft was up 4.3 percent at a record closing high of $59.69, while
McDonald's was up 3 percent at $113.93.
With 23 percent of S&P 500 companies posting results, earnings are now
expected to show growth of 1.1 percent for the third quarter, up from
the 0.5 percent decline expected at the start of the month, according to
Thomson Reuters data.
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Traders work on the floor of the New York Stock Exchange (NYSE) in
New York City, U.S., October 21, 2016. REUTERS/Brendan McDermid
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The Dow Jones industrial average <.DJI> fell 16.64 points, or 0.09 percent, to
18,145.71, the S&P 500 <.SPX> lost 0.18 points, or 0.01 percent, to 2,141.16 and
the Nasdaq Composite <.IXIC> added 15.57 points, or 0.3 percent, to 5,257.40.
For the week, the Dow edged up 0.04, the S&P rose 0.4 percent and the Nasdaq
climbed 0.8 percent.
Telecoms <.SPLRCL>, down 2.3 percent, were lower for a second straight session.
AT&T <T.N> lost 3 percent on news the wireless carrier was in advanced talks to
buy Time Warner <TWX.N>, whose stock surged 7.8 percent.
In other deal news, Reynolds American <RAI.N> jumped 14 percent after British
American Tobacco <BATS.L><BTI.A> offered to buy the 58 percent of the tobacco
company it does not already own in a $47 billion takeover.
Advancing issues outnumbered declining ones on the NYSE by a 1.04-to-1 ratio; on
Nasdaq, a 1.20-to-1 ratio favored decliners.
The S&P 500 posted 8 new 52-week highs and 3 new lows; the Nasdaq Composite
recorded 52 new highs and 38 new lows.
About 5.97 billion shares changed hands in U.S. exchanges, below the 6.4 billion
daily average over the last 20 sessions.
(Reporting by Chuck Mikolajczak; Editing by Dan Grebler and Nick Zieminski)
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