IBM pulls the stock market out of a morning slump

Associated Press
Specialist John Parisi, right, works at his post on the floor of the New York Stock Exchange Tuesday, April 30, 2013. Stock prices are opening mostly lower on Wall Street as weak earnings from Pfizer and other companies drag down major market averages. (AP Photo/Richard Drew)
.

View gallery

NEW YORK (AP) — News that IBM will buy back more stock and raise its dividend helped pull major stock indexes out of a morning slump Tuesday.

IBM and other technology stocks led the Standard & Poor's 500 index up. The broad-market measure ended April with a 1.8 percent gain, the sixth month in a row the index has climbed higher.

Worries about slower economic growth have rattled the stock market this month, but it has consistently bounced back. Brad Sorensen, director of market research at the brokerage Charles Schwab, said that's a result of investors having few alternatives.

"Right now it seems like every pullback in the market is seen as a buying opportunity," Sorensen said. "People may say they're getting nervous, but where else are you going to put money at this point? Into Europe with their political issues? Into Treasurys paying less than 1.7 percent?"

The S&P 500 edged up 3.96 points to close at 1,597.57. The slight gain of 0.3 percent pushed the index to an all-time high for the second day straight.

A report of another record high in European unemployment helped drive money into U.S. government debt, briefly sending the yield on the benchmark 10-year Treasury note to its lowest level of the year, 1.65 percent.

IBM said it will increase its quarterly dividend by a dime, to 95 cents, and buy back up to $5 billion more of its own stock. Earlier this month, the company surprised investors when it reported a drop in quarterly earnings and sales. IBM's stock rose $3.39 to $202.54.

The tech giant's 1.7 percent gain tugged the Dow Jones industrial average up. The Dow fell as much as 84 points in morning trading but ended with a gain of 21.05 points at 14,839.80. That's an increase of 0.1 percent.

The S&P has now climbed for six months in a row. That's the longest stretch of gains since a seven-month run that started in March 2009, when the market hit a financial crisis low, and ended in October 2009.

This earnings season has delivered investors a mixed bag of news. More than half of the companies in the S&P 500 have turned in results, and seven of 10 have beaten analysts' estimates for earnings, according to S&P Capital IQ. Nearly as many, however, have come up short on revenue: Six of 10 have missed analysts' revenue targets. That suggests companies are getting more of their profits from laying off staff and other cost-cutting efforts instead of from higher sales.

The Dow and the S&P 500 ended the month with gains of 1.8 percent. It wasn't exactly a smooth ride. The two indexes reached record highs in the second week of April, then took a steep fall in the next. News that China, the world's second-largest economy, slowed unexpectedly pummeled the prices of oil, copper and other commodities. The stock market had its worst day of the year on April 15, when the S&P 500 lost 2.3 percent.

In other trading, the Nasdaq composite index rose 21.77 points to 3,328.79, up 0.7 percent. The dollar fell against the yen and the euro, and the price of crude oil fell $1 to $93.46 a barrel. Gold edged up $4.70 to $1,472.10 an ounce.

The yield on the 10-year Treasury note traded at 1.67 percent late Tuesday, the same as the day before. In response to slower economic growth, bond traders from around the world have been buying Treasurys this month, driving yields down. The 10-year yield started April around 1.85 percent.

Among other stocks making big moves:

— Pfizer dropped 4 percent after the drug maker's results fell short of what analysts had expected. Falling sales of Lipitor, its cholesterol drug, crimped revenue. The world's second-largest drug maker also cut its profit forecast for the rest of the year. Pfizer lost $1.36 to $29.07

— Pitney Bowes sank 16 percent after the maker of mailing equipment and software cut its dividend in half and posted a 58 percent drop in net income. Pitney Bowes sank $2.53 to $13.67.

— Avon Products' quarterly loss wasn't as deep as analysts had expected. The direct-seller of cosmetics has been cutting staff and scaling back operations in an effort to turn around its business. Avon's stock rose 92 cents to $23.16, a gain of 4 percent.

View Comments (1)

Recommended for You

  • US billionaire says WWII Japanese ship found in Philippines

    Microsoft co-founder Paul Allen said Wednesday he had found one of Japan's biggest and most famous battleships on a Philippine seabed, some 70 years after American forces sank it during World War II. Excited historians likened the discovery, if verified, to finding the Titanic, as they hailed the…

    AFP
  • Senate fails to override Obama's veto of Keystone XL approval

    By Susan Cornwell WASHINGTON (Reuters) - The U.S. Senate failed on Wednesday to override President Barack Obama's veto of legislation approving the Keystone XL oil pipeline, leaving the controversial project to await an administration decision on whether to permit or deny it. The Senate mustered…

    Reuters
  • France, Cameroon wouldn't take foreigner later shot by LAPD

    LOS ANGELES (AP) — A homeless foreigner shot to death by Los Angeles police was in the country illegally after serving time for a bank robbery but couldn't be deported because no country would take him, U.S. immigration authorities said Wednesday.

    Associated Press
  • 175-Pound Pit Bull Hulk Shatters Misconceptions About the Breed

    This dog just may be the world's largest Pit Bull. Only 18-months-old, Hulk weighs a hefty 175 pounds. He's also best friends with a 3-year-old boy.

    ABC News
  • U.S. may review 1959 airplane crash that killed Buddy Holly

    (Reuters) - U.S. transportation safety investigators said on Wednesday they are reviewing a request to reopen a probe into the 1959 airplane crash that killed musicians Buddy Holly, Ritchie Valens, J.P. Richardson, better known as "The Big Bopper," and their pilot. The original investigation 56…

    Reuters
  • View

    Turkish jetliner skids off on runway (9 photos)

    A Turkish Airlines jet landing in dense fog in the Nepalese capital Wednesday skidded off a slippery runway but there were no serious injuries, officials said. Officials at Kathmandu's Tribhuwan International Airport said the plane with 238 people on board was coming from Istanbul when the…

    Yahoo News
  • Former marine reported killed in Syria

    A former Royal Marine has become the first Briton to be killed while fighting with Kurdish forces battling Islamic State jihadists in Syria, leaving his family "devastated" Wednesday. Konstandinos Erik Scurfield, 25, died on Monday in a battle with IS militants, a source in the Kurdish People's…

    AFP
  • Chad president tells Boko Haram leader to surrender or face death

    By Madjiasra Nako N'DJAMENA (Reuters) - President Idriss Deby of Chad said on Wednesday he knew the whereabouts of Abubakar Shekau, the leader of the Nigerian militant group Boko Haram, and called on him to surrender or risk being killed. Chad's army has waged a series of battles against Boko Haram…

    Reuters
  • 'Thousands' of Russian troops in east Ukraine: US envoy

    The United States' senior envoy to Europe alleged Wednesday that Russia had deployed "thousands and thousands" of troops to neighboring Ukraine. Speaking to a congressional foreign affairs committee, Assistant Secretary of State Victoria Nuland also told US lawmakers that Russia was flooding…

    AFP
  • Mom convicted of killing son, 5, by poisoning him with salt

    WHITE PLAINS, N.Y. (AP) — A woman who blogged for years about her son's constant health woes was convicted Monday of poisoning him to death by force-feeding heavy concentrations of sodium through his stomach tube.

    Associated Press
  • Georgia police officer killed in shootout

    By David Beasley ATLANTA (Reuters) - A Georgia police officer was killed in a shootout with a suspect in suburban Atlanta early on Wednesday, authorities said. Officers went to investigate reports of shots in a suburban neighborhood and came under fire about 1:30 a.m. EST, according to the Fulton…

    Reuters
  • Survivor testifies about 2 friends stabbed, bound, drowned

    PHILADELPHIA (AP) — A man who survived being beaten, bound, stabbed in the neck and kicked into the Schuylkill River took the stand in a hearing Tuesday and described the night his two friends lost their lives.

    Associated Press
  • Marijuana Growers Arrested After Pocket Dialing 911

    Three men in California were arrested Monday night after one of the suspects pocket dialed 911. The emergency operator who took the call heard two of the men talking about the possibility of getting pulled over, leading to a major drug bust.

    KSWB - San Diego
  • Iranian president says Israel 'greatest danger'

    Iranian President Hassan Rouhani on Wednesday said Israel creates the "greatest danger" in the region, after Israeli Prime Minister Benjamin Netanyahu warned against a nuclear deal with the Islamic republic. In a speech on Capitol Hill, Netanyahu said Tuesday the nuclear agreement US President…

    AFP
  • Killers sought in deaths of 300,000 chickens in South Carolina

    By Harriet McLeod CHARLESTON, S.C. (Reuters) - Revenge may be the motive for the killings in South Carolina of more than 300,000 commercial chickens worth about $1.7 million over the past two weeks, authorities said on Monday. Birds have been found dead of unnatural causes in 16 chicken houses at…

    Reuters
  • Allen says he won't join a team this season

    Ray Allen, who helped the Boston Celtics and Miami Heat win NBA titles, will not reunite with LeBron James in Cleveland, saying Wednesday he will sit out the current season. The 39-year-old guard, one of the NBA's all-time top shooters and the league's career 3-pointers leader, had hinted that he…

    AFP57 mins ago
  • Americans Love K-Cups, but Their Creator Regrets Inventing Them

    Now it seems that John Sylvan, the inventor of the tiny containers, is firmly on Team #KillTheKCup too. “No matter what they say about recycling, those things will never be recyclable,” said Sylvan.

    Takepart.com
  • Afghan forces kill dozens of militants in hostage rescue operation

    By Sarwar Amani KANDAHAR (Reuters) - Afghan security forces have killed dozens of militants in a military operation aimed at freeing a group of civilian hostages in southern Afghanistan, an army official said on Wednesday. Eyewitnesses said most passengers belonged to the ethnic Hazara minority, a…

    Reuters