Closing Market Summary: Stocks End Mixed Once Again
Equities endured an uninspiring Wednesday session, which unfolded in similar fashion to Tuesday's affair. Like yesterday, the major averages ended mixed with the Dow Jones Industrial Average (-0.3%) coming out on the losing end while the Nasdaq (+0.4%) and S&P 500 (+0.1%) eked out modest gains.
The price-weighted Dow spent the entire session in the red as 19 of its 30 components registered losses. Most notably, the second-largest index member, IBM (IBM 182.25, -6.18), plunged 3.3% after beating its Capital IQ earnings estimate by 13 cents on below-consensus revenue. Despite the bottom-line beat, the report was scrutinized due to the company accounting for a lower tax rate than in previous quarters.
On the upside, another large index member, United Technologies (UTX 116.12, +1.13), gained 1.0% after reporting a bottom-line beat on below-consensus revenue. Furthermore, the stock factored into the outperformance of the industrial sector (+0.2%), which also drew strength from transports. The Dow Jones Transportation Average jumped 1.1% with help from railroads after Norfolk Southern (NSC 92.94, +4.23) reported an earnings beat.
Like industrials, most other cyclical sectors finished just ahead of the broader market. The discretionary sector (+0.3%) rallied despite cautious action among retailers after Coach (COH 49.38, -3.17) reported disappointing earnings and said its North American comparable-store sales tumbled 13.6% during the quarter.
Elsewhere, energy (+0.3%) climbed as crude oil rose 1.8% to $96.72/bbl while materials (-0.9%) lagged after Freeport-McMoRan (FCX 34.52, -0.74) reported a top-line miss.
The remaining cyclical groups, financials (+0.1%) and technology (unch) ended little changed.
On the countercyclical side, health care (+0.1%) and utilities (+0.1%) finished in-line with the S&P 500 while consumer staples (-0.1%) and telecom services (-0.7%) ended in the red.
Treasuries finished in the red as the 10-yr yield ticked up three basis points to 2.86%. Trading volume was well below average with only 616 million shares changing hands at the NYSE.
Today's economic data was limited to the weekly MBA Mortgage Index, which rose 4.7% to follow last week's 11.9% increase.
Tomorrow, weekly initial claims will be reported at 8:30 ET while the November FHFA Housing Price Index will be released at 9:00 ET. December Existing Home Sales and Leading Indicators will cross the wires at 10:00 ET. Nasdaq Composite +1.6% YTD Russell 2000 +1.6% YTD S&P 500 -0.2% YTD Dow Jones Industrial Average -1.2% YTD