The Dow Snaps Two-Day Losing Streak
Stocks closed mixed Friday as better-than-expected earnings from General Electric (GE) helped the Dow and S&P 500 snap two-day losing streaks, but the Nasdaq closed lower after disappointing results from Advanced Micro Devices (AMD).
The Dow added 49 points, or 0.4%, to close at 11,872. The broader S&P 500 ($INX) rose 3 points, or 0.2%, to finish at 1,283. The tech-heavy Nasdaq Composite ($COMPX) fell 15 points, or 0.6%, to settle at 2,690.
Dow component GE helped lift the blue chips after reporting a 52% jump in fourth-quarter income, thanks to strong growth in equipment orders and an improvement in its lending business. GE's earnings from continuing operations came to 36 cents a share, topping analyst's average forecast for earnings of 32 cents. GE said revenue grew year-over-year for the first time in nine quarters, increasing 1%
to $41.4 billion. Wall Street analysts had expected revenue of $40.3 billion.
Bad Mortgages Pummel Bank of America Again
GE's results offset declines by Dow component Bank of America (BAC), which weighed on financial stocks after it posted disappointing fourth-quarter results. The nation's biggest bank by assets reported a loss of $1.6 billion in the fourth quarter after its costs related to soured home loans increased.
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Bank of America's loss available to shareholders after paying out dividends was 16 cents per share. Analysts, on average, expected the bank to earn 18 cents a share. Excluding a charge of $2 billion related to the home loans, the bank would have earned 4 cents a share. In last year's fourth quarter, the bank recorded a loss of $5.2 billion.
Tech stocks were weighed down by disappointing news from AMD. The chipmaker beat Wall Street's fourth-quarter earnings estimate when it released results after Thursday's closing bell, but shares fell sharply Friday on flat year-over-year revenue growth.
A Gradual Bullish Trend
This week's string of strong earnings from the likes of Apple (AAPL), Google (GOOG), Morgan Stanley (MS) and now GE bodes well for upcoming corporate reports and market action ahead, says Joe Greco, managing director at Meridian Equity Partners.
"For the most part we continue to trend in a gradual move to the upside," Greco says. "From a tech perspective, from a manufacturing perspective and, of course, from the financials, [management] is saying we're doing well, and we've been doing well for the last several quarters."
For more on Greco's take from the floor of the New York Stock Exchange (NYX), see the video above.
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