IBM comes to the rescue

Indices get a good boost as the tech bellwether reports stronger than expected Q4 earnings

With the help of IBM, US stock market made a modest comeback today, Monday, 14 January, 2008. Despite ongoing concerns about the financial sector and the overall economy, Dow registered a triple digit gain. Eight out of ten economic sectors posted gains.

Before the opening bell, IBM announced revenues of $28.9 billion and earnings of $2.80 per share versus analysts' expectations that called for revenue of $27.8 billion and earnings of $2.60 per share for the fourth quarter of FY 2007. IBM attributed its performance to strong international growth and a weaker dollar. This news gave the futures market a noticeable lift.

IBM also said that the results were driven by "strong operational performance in Asia, Europe and emerging countries." The company will provide full results on Thursday, 17 January.

The Dow Jones industrial Average ended the day with a good gain of 171.85 points at 12,778.15. The Nasdaq Composite Index, finished higher by 38.36 points at 2,478.3. S&P 500 finished higher by 15.23 points at 1,416.25.

Twenty-six out of thirty Dow stocks ended in the green today. IBM, H-P and Citigroup headed the team of Dow winners. Merck was a notable Dow laggard today.

H-P and Apple help lift Nasdaq after a long time

Citigroup shares were notably up 1.8% amid reports the bank would announce a write-down of as much as $24 billion and job cuts of between 17,000 and 24,000. The company’s earnings are expected tomorrow.

IBM stock gave a good boost to overall technology sector also. H-P and Apple shares soared helping Nasdaq register good gains after a long time.

Indian ADRs ended mixed today. HDFC Bank was the main winner gaining 4.3% while MTNL was the main loser shedding more than 5%.

Crude prices rose for the first time after slipping for four previous consecutive sessions. Prices rose today as tensions between US and Iran increased, fresh violence was reported at Nigeria and the dollar continued to weaken against its rivals. Crude-oil futures for light sweet crude for February delivery today closed at $94.2/barrel (higher by $1.6/barrel or 1.5%) on the New York Mercantile Exchange.

Volume on the New York Stock Exchange topped 1.4 billion, and advancing stocks led decliners more than 2 to 1. On the Nasdaq, nearly 2.2 billion shares changed hands, and advancers shot past decliners 9 to 5.

Investors will have lots of economic data and key earnings reports tomorrow to focus upon. In terms of economic data, the Producer Price Index will hit the wires at 8:30 ET, followed by December retail sales results, New York Empire State Index. On the earnings front, Citigroup is one of the major ones to report before market opens while Intel will report after close.