By Sue Chang and Chris Matthews, MarketWatch
IBM, United Technologies, P&G power Dow's gains
Stocks closed higher in choppy trade Wednesday as upbeat
earnings from corporate heavyweights helped to assuage lingering
worries over global growth and U.S.-China trade tensions.
How did the benchmarks fare?
The Dow Jones Industrial Average gained 171.14 points, or 0.7%,
to 24,575.62, while the S&P 500 index rose 5.8 points, or 0.2%,
to 2,638.70 and the Nasdaq Composite climbed 5.41 points to
7,025.77.
Read: An earnings 'valley' means trouble ahead for stocks,
strategist warns
(http://www.marketwatch.com/story/an-earnings-valley-means-trouble-ahead-for-stocks-strategist-warns-2019-01-23)
What drove the market?
Investors are laser-focused on fourth quarter results and
closely monitoring what corporate executives are saying about the
outlook for profits and revenue in 2019. Earnings reports have been
largely well received by investors, starting with International
Business Machines Corp. (IBM) after the management issued a bullish
outlook for profits
(http://www.marketwatch.com/story/ibm-beats-expectations-but-revenue-drops-again-2019-01-22).
On the trade front, Reuters reported
(https://www.reuters.com/article/us-usa-china-trade-analysis/trump-wont-soften-hardline-on-china-to-make-trade-deal-advisers-idUSKCN1PH02I)
that President Donald Trump won't agree to any deal with China
unless Beijing agrees to make substantive changes
(http://www.marketwatch.com/story/trump-not-going-to-back-down-on-trade-deal-without-china-concessions-report-2019-01-22)
to the way it does business, including how it handles intellectual
property.
See:Frustrated investors say Trump administration overly
sensitive to stock-market gyrations
(http://www.marketwatch.com/story/frustrated-investors-say-trump-administration-overly-sensitive-to-stock-market-gyrations-2019-01-23)
Also read:Wall Street worries about China slowdown complicate
Trump's get-tough trade strategy
(http://www.marketwatch.com/story/wall-street-worries-about-china-slowdown-complicate-trumps-get-tough-trade-strategy-2019-01-22)
Meanwhile, the Senate was poised to vote Thursday
(http://www.marketwatch.com/story/senate-to-vote-on-dueling-shutdown-bills-thursday-with-neither-expected-to-pass-2019-01-22)
on dueling proposals to reopen the government. A partial shutdown
entered its 33rd day amid mounting concerns over its potential
impact on the economy. Neither proposal set for a vote is seen as
likely to pass the Senate, but analysts said movement might provide
some hope that the long-running impasse is nearer to a
resolution.
See:Government shutdown likely to end in two weeks, analyst says
(http://www.marketwatch.com/story/government-shutdown-likely-to-end-in-next-two-weeks-analysts-says-2019-01-22)
In overseas news, events in Venezuela could have an impact on
the markets if the political unrest escalates. Venezuela's
President Nicolás Maduro broke off diplomatic relations
(http://www.marketwatch.com/story/venezuelas-maduro-gives-us-diplomats-72-hours-to-leave-after-trump-recognizes-opposition-leader-guaido-2019-01-23)
with the U.S. after Washington's decision to recognize Juan Guaido,
the head of the opposition-controlled congress, as interim
president.
Read:Here's what Venezuela turmoil means for oil prices
(http://www.marketwatch.com/story/heres-what-venezuela-turmoil-means-for-oil-prices-2019-01-23)
What stocks were in focus?
IBM stock soared 8.5% to lead the Dow. Fellow blue chip United
Technology Corp. (UTX) rose 5.4% after the company beat on both
revenue and earnings
(http://www.marketwatch.com/story/united-tech-sees-sales-growth-ahead-of-breakup-2019-01-23).
Shares of Procter & Gamble Co. (PG) advanced 4.9% after the
firm reported better-than-expected revenue and earnings and raised
the high end of its guidance for 2019 organic sales growth
(http://www.marketwatch.com/story/pg-raises-outlook-after-strong-sales-growth-2019-01-23).
Shares of Burger King parent Restaurant Brands International
Inc. (QSR) rallied 9.8% after the company named Jose Cil, currently
president of Burger King, as chief executive officer
(http://www.marketwatch.com/story/burger-king-parent-restaurant-brands-names-jose-cil-as-ceo-provides-upbeat-sales-data-2019-01-23).
The company also provided upbeat sales data and raised its
quarterly dividend.
Shares of Kimberly-Clark Corp. (KMB) were down 2.7% after the
consumer goods company posted a fourth-quarter earnings miss
(http://www.marketwatch.com/story/pg-raises-outlook-after-strong-sales-growth-2019-01-23).
Tesla Inc. (TSLA) shares slid 4% after RBC downgraded the stock
to underperform to outperform
(http://www.marketwatch.com/story/tesla-shares-fall-premarket-after-rbc-downgrade-2019-01-23),
while cutting its price target to $245 from $290.
Shares of Comcast Corp. (CMCSA) rose 5.5% after the
internet-service provider exceeded analysts expectations for
profits and sales
(http://www.marketwatch.com/story/comcast-lifted-by-media-and-broadband-growth-2019-01-23-74853642).
Abbott Laboratories(ABT) stock shed 2.2% after the firm's
fourth-quarter revenue fell short of expectations
(http://www.marketwatch.com/story/abbott-stock-falls-27-after-company-fall-shorts-on-4q-revenue-2019-01-23).
Shares of Synchrony Financial(SYF) jumped 11% after the firm
announced
(http://www.marketwatch.com/story/synchronys-stock-soars-after-walmarts-sams-club-partnership-extended-earnings-beat-expectations-2019-01-23)
that it had extended its partnership with Walmart Inc.'s (WMT)
Sam's Club, and reported that Walmart had agreed to dismiss a
lawsuit against the company.
What were analysts saying?
"Yesterday the story was all about weakening global growth, but
today it's all about positive earnings momentum," said Jeffrey
Kravetz, regional investment director at U.S. Bank Private Client
Reserve. "Bellwether S&P 500 companies are posting solid
earnings, and the outlooks have been good."
IBM's fourth quarter earnings report was "arguably its cleanest
quarter in years," wrote Joel Kulina, analyst with Wedbush
Securities, in a note to clients. Investors should take solace in
management providing "further evidence of strength in software,
analytics and services focused on hybrid cloud and digital
strategy." IBM's strong numbers bode well for the cloud complex, he
said.
"The market is reluctant to overcome fears of slowing global
growth, China-U.S. trade relations, and the government shutdown,"
Michael Arone, chief investment strategist at State Street Global
Advisors told MarketWatch. "The culmination of all that suggests
challenges for stocks to move higher, despite earnings that have
been better than expected."
How were other markets trading?
Asian markets traded mostly flat
(http://www.marketwatch.com/story/asian-markets-flat-as-japan-reports-weak-export-data-2019-01-22),
with Japan's Nikkei 225 index closing 0.1% lower, while Hong Kong's
Hang Seng index was virtually unchanged and the Shanghai Composite
Index rose less than 0.1%.
In Europe, stocks were mixed
(http://www.marketwatch.com/story/european-investors-unnerved-by-economic-slowdown-and-trade-uncertainty-2019-01-23),
with the Stoxx Europe 600 closing down 0.1%.
Crude oil failed to hold early gains
(http://www.marketwatch.com/investing/future/clh9), with the U.S.
benchmark lower, while gold
(http://www.marketwatch.com/story/gold-pushes-higher-as-dollar-sinks-2019-01-23)
settled virtually unchanged and the U.S. dollar
(http://www.marketwatch.com/story/dollar-continues-slide-as-risk-sensitive-currencies-recover-2019-01-23)
fell 0.2%.
--William Watts contributed to this report
(END) Dow Jones Newswires
January 23, 2019 16:33 ET (21:33 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.