Wall Street’s blue-chip index Dow Jones Industrial Average rose on Wednesday thanks to good financial reports from companies like IBM, United Technologies and Procter & Gamble.
Dow Jones finished the trade with a growth of only 40 points, although had a growth of 300 points earlier in the session. The broader S&P 500 and the technology Nasdaq Composite added 0.22% and 0.08% respectively.
Dow Jones finished on green territory after yesterday the index wiped out more than 300 points because of concerns about the growth of the global economy.
The International Monetary Fund (IMF) reviewed its global growth forecast earlier this week, indicating that it expects growth of 3.5% in 2019 and 3.6% in 2020. The fund also lowered its expectations in October because of the trade conflict. At the moment, many uncertainties such as Brexit and weak economic data in China remain.
Meanwhile, investors continue to closely monitor trade talks with China. White House Economic Adviser Larry Kudlow told that the meeting between US and Chinese sales representatives was cancelled. He added that there are no other planned meetings besides the visit of China Deputy Prime Minister Liu He.
The crude oil prices fell at the end of the session, with futures on WTI falling by 0.66% to 52.66 USD per barrel, while Brent wiped out 0.52% to 61.18 USD per barrel. The price of gold also remained in the red zone with a minimal decline in its price by 0.08% to 1,282.40 USD per ounce.
Corporate stocks performance
More than 14% of the S&P 500 companies have posted their fourth-quarter results. Nearly 73% of them have exceeded earnings estimates. Overall, companies’ earnings increased by 13.2%, a little above preliminary estimates. While retaining this result, this would mean the weakest earnings growth rate since the fourth quarter of 2017 when the positive financial result of S&P 500 companies increased by 15.5%.
United Technologies and Procter & Gamble grew by more than 4.8% after better-than-expected earnings. IBM posted an increase of 8.5%, ending its best session since October 18, 2017.
The technology sector is the one which can write a story. Looking at the margins in the sector, they are much larger than other sectors.
In the meantime, two stocks in the retail restaurant group scored new highs. Chipotle Mexican Grill nudged above a new high in fast trade but then pulled off the day’s high. El Pollo Loco popped 1% to a new high.
Corporate earnings reports
The consumer-goods seller Procter & Gamble earned 1.25 USD per share in the fiscal second quarter, which is 0.04 USD higher than what analysts were expecting. The company generated revenue of 17.44 billion USD, outpacing the Wall Street consensus of 17.16 billion USD. Procter & Gamble said its organic sales increased 4%, topping the 2.6% growth that was expected. Its beauty products, health care and fabric and home care businesses all contributed to the gains. The company said about 1% of its organic sales growth in the quarter came from higher pricing.
Another big winner during the trading session was IBM, which revenue for the fourth quarter was 21.8 billion USD, beating the average analyst forecast of 21.7 billion USD. Earnings were 4.87 USD per share, also beating analysts’ forecasts. IBM said it sees adjusted earnings per share of at least 13.90 USD in 2019. Analysts had predicted 13.89 USD. The revenue from cloud-based offerings grew about 12% to 19.2 billion USD in 2018, but that’s about half the growth rate of last year. IBM agreed to buy software maker Red Hat Inc for 33 billion USD in October to jump-start its efforts to catch up in the cloud. Rometty called the purchase “a game changer” for IBM.