Strong IBM earnings lift Dow above 23,000 points
NEW YORK: The Dow jumped above 23,000 points early yesterday, boosted by IBM, which surged after it reported growth in key cloud computing and artificial intelligence businesses.
IBM, which has suffered more than five years of revenue declines, shot up 7.8 percent after it reported a four percent drop in third-quarter earnings to $2.7 billion. But earnings-per-share bested analyst expectations and revenues in IBM’s closely-watched cloud computing division rose 20 percent compared with the year-ago period
About 20 minutes into trading, the Dow Jones Industrial Average was at 23,107.66, up 0.5 percent. The Dow briefly topped 23,000 on Tuesday, but finished slightly below that mark. The broad-based S&P 500 climbed 0.1 percent to 2,561.13, while the tech-rich Nasdaq Composite Index retreated slightly to 6,622.44.
US stocks have scored numerous records in recent weeks in anticipation of solid earnings and enactment of a tax cut supported by President Donald Trump. Yesterday, Treasury Secretary Steven Mnuchin warned that the stock market would drop if Washington fails to pass the tax measure. Housing data released yesterday showed a drop in September in housing starts and permits for new construction, due partly to US hurricanes, but also declines in some other regions.
European stock markets mostly advanced yesterday, though Madrid fell as Spain threatened to suspend Catalonia’s autonomy. In early afternoon deals, Madrid’s IBEX 35 index was down 0.3 percent, while the euro fell versus the dollar. Spain said yesterday it would take the unprecedented step of seeking to suspend Catalonia’s autonomy if the region’s leader does not abandon his independence bid, on the eve of his deadline to give a final answer. Elsewhere in Europe, London’s benchmark FTSE 100 index was up 0.3 percent as traders digested official data showing British unemployment sticking to a 42-year low point.
Sterling fell with markets not certain on whether the Bank of England will raise interest rates next month despite rising British inflation. “The UK is a key focus for markets this week as traders try to determine whether or not the Bank of England will follow through on warnings that interest rates could rise at an upcoming meeting,” said Craig Erlam, senior market analyst at Oanda trading group.
In Asia, Tokyo’s main stocks index ended up 0.1 percent at another 21-year high-but Seoul dropped 0.1 percent, and Taipei, Manila and Jakarta also turned negative. Hong Kong edged 0.1-percent higher to rack up a fifth successive day of gains that have left it at a 10-year high, while Sydney and Wellington were both marginally higher. Shanghai was up 0.3 percent. Chinese dealers are watching Beijing, where the Communist Party yesterday kicked off its once-a-decade congress to hand Xi Jinping a second five-year term, consolidating his already immense power at the helm of the world’s number-two economy. Markets are hoping the leadership provides some idea about future policy, particularly in tackling the country’s titanic debt mountain and possible further liberalization.
On Tuesday in New York, the Dow and S&P 500 stock indices closed at new all-time highs following solid results from big firms including Johnson & Johnson and Goldman Sachs, which reinforced confidence across trading floors. However, some analysts are warning of a retreat before the end of the year, with Goldman citing the fate of US President Donald Trump’s tax plan as key. Oil prices meanwhile rose following data showing a drop in US stockpiles and with the commodity continuing to get support from ongoing battles between Iraqi and Kurdish forces in the disputed northern Iraq province of Kirkuk. Crude fields taken Tuesday by the Iraqi army accounted for more than 400,000 of the 650,000 barrels per day that the autonomous Kurdish region used to export in defiance of Baghdad. — Agencies