U.S. Stocks Waver Around Flat-Line - Wall Street Journal U.S. Stocks Waver Around Flat-Line - Wall Street Journal

Thursday, July 19, 2012

U.S. Stocks Waver Around Flat-Line - Wall Street Journal

U.S. Stocks Waver Around Flat-Line - Wall Street Journal

NEW YORK—U.S. stocks swung between gains and losses as International Business Machines and other technology stocks rallied after quarterly earnings reports, offsetting disappointing economic data.

Markets rose on upbeat tech earnings, despite a somber jobless claims report. Jonathan Cheng reports on Markets Hub. Photo: AP.

The Dow Jones Industrial Average rose nine points, or 0.1%, to 12916 in afternoon trading after wavering around the flat-line.

The Standard & Poor's 500-stock index added one point, or 0.1%, to 1374. The technology and materials sectors saw the biggest advances among the index's 10 groups. The tech-heavy Nasdaq Composite Index advanced 20 points, or 0.7%, to 2963.

"You've got the economic data that has offset good earnings reports. I think there's enough out there to have some guys take some profits, but this market has been pretty resilient," said Rick Bensignor, chief market strategist at Merlin Securities.

IBM's shares gained, on track for the biggest increase since January. The rally contributed more than 50 points to the price-weighted Dow Jones Industrial Average's move.

Qualcomm rose after the semiconductor maker said it was on track to resolve the supply issues that prompted the company to lower revenue forecasts for the current quarter. EBay shot up to a more than a six-year high after the online auctioneer's second-quarter earnings and revenue exceeded analysts' forecasts.

"The tone of earnings season has been firmer than people thought," said Greg Peterson, director of investment research at Ballentine Partners, which oversees $3.5 billion of assets. "I think they were expecting things to fall off the edge, and they aren't."

Among other companies that reported earnings were Morgan Stanley, which dropped after profit missed forecasts amid weakness in the company's institutional securities business. Textron climbed results from the maker of Bell helicopters and Cessna aircraft topped analysts' predictions.

A downbeat round of economic data kept a lid on the market's gains. The number of Americans filing for jobless benefits jumped to 386,000 last week, the Labor Department reported, more than expected by economists polled by Dow Jones Newswires. The prior week's reading was revised higher but remained at the lowest level since 2008.

Sales of previously occupied homes unexpectedly fell in June, to the lowest level in eight months, the National Association of Realtors reported.

Factory activity in the Mid-Atlantic region contracted, albeit at a slower pace, for a third straight month in July, according to the Federal Reserve Bank of Philadelphia's index of manufacturing activity. The Conference Board's leading economic index fell further than forecast.

European markets were broadly higher, with the Stoxx Europe 600 rising 1.1% as strong earnings and Germany's expected approval of the aid plan for Spanish banks buoyed sentiment. Among European companies that reported better-than-expected results were Novartis, Akzo Nobel and Electrolux .

Asian markets rallied on the back of strength in the U.S. and in resource stocks, which were boosted by continued gains in oil prices. China's Shanghai Composite rose 0.7%, Australia's S&P ASX 200 ran up 2%, and Japan's Nikkei Stock Average advanced 0.8%.

In other corporate news, Walgreen jumped, leading the S&P 500 higher, after ending a seven-month dispute with pharmacy-benefits manager Express Scripts that had prevented millions of patients from getting prescriptions filled at the drugstore chain.

Dow component American Express slipped. The charge-card company reported second-quarter earnings that topped expectations but revenue that fell a bit shy.

Verizon Communications lost after releasing second-quarter earnings that were in line with expectations.

Teen retailer Five Below jumped on its first day of trading, after its initial public offering priced at the high end of a recently boosted expected range. Durata Therapeutics advanced. The drug developer sold more shares than it had originally planned in its IPO but at a price below its expected range.

Write to Matt Jarzemsky at matthew.jarzemsky@dowjones.com

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