Closing Bell: S&P 500 Sets Record as Investors Refocus on Earnings

U.S. Stocks Fall After Debt Deal as IBM, Goldman Tumble
Scott Eells/Bloomberg via Getty Images

U.S. markets ended mostly higher Thursday as investors shrugged off the more-than-two-week-long government shutdown and began to focus on corporate earnings, but a few troubled blue chips dragged the Dow to a small loss.

The Dow Jones industrial average (^DJI) lost 2 points to 15,371, the Nasdaq composite index (^IXIC) climbed 23 points, or 0.6 percent, to 3,863, and the Standard & Poor's 500 index (^GPSC) gained 11 points, or 0.6 percent, to 1,733, breaking its all-time record.

The Dow was held in check by IBM (IBM), Goldman Sachs and UnitedHealth. IBM said Wednesday that its third-quarter net income rose 6 percent, but revenue fell and missed Wall Street's forecast by more than $1 billion. The technology giant's shares fell 6.5 percent to $174.57.

Meanwhile, Goldman Sachs (GS) reported its revenue fell sharply in the third quarter, as trading in bonds and other securities slowed. The investment bank's shares slumped 2.6 percent to $158.11. And UnitedHealth Group (UNH) lost 5.1 percent to $71.35, after the health insurance giant narrowed its 2013 profit forecast instead of raising it, giving some analysts pause.

Market analysts say the 16-day partial shutdown of the government caused billions of dollars of damage to the U.S. economy due to the furloughs of government employees, delayed government contracts, and declines in tourism at national parks, among other things. Analysts at Wells Fargo (WFC) said the shutdown likely cut 0.5 percentage points off of U.S. economic growth.

Dallas Federal Reserve President Richard Fisher said he is seeing signs of the United States re-entering a "housing bubble," and warned about the U.S. central bank's ongoing purchases of mortgage-based bonds. %VIRTUAL-article-sponsoredlinks%"I'm beginning to see signs not just in my district but across the country that we are entering once again a housing bubble," Fisher told reporters. "So that leads me ... to be very cautious about our mortgage-backed securities purchase program."

In economic news, data showed the number of Americans filing new claims for unemployment benefits dropped from a six-month high last week but remained elevated as California continued to deal with a backlog related to computer problems.

Other data showed the pace of manufacturing growth in the U.S. mid-Atlantic region slowed slightly in October, but firms' optimism about the future hit a 10-year high, a survey showed.

Corporate earnings are expected to continue to dominate trading for the next couple weeks. So far, only 79 companies in the S&P 500 have reported third-quarter results, according to S&P Capital IQ. Analysts expect earnings at those companies to increase 3.3 percent over the same period a year ago.

In commodities treading, oil prices fell to their lowest level since early July as relief faded over a U.S. deal to avoid a default on its debts. Benchmark crude for November delivery fell $1.62, or 1.6 percent, to $100.67. Gold rose, picking up $37.90, or 0.3 percent, to end at $1,319.90

In corporate news, eBay (EBAY) dropped 4.1 percent at $51.34 and was the biggest drag on the Nasdaq 100 index. The company gave a disappointing holiday forecast Wednesday, saying the U.S. economic environment had deteriorated partly because of the government shutdown.

More Stocks in The News:

  • Verizon Communications (VZ), however, was a bright spot as shares rose 3.5 percent to $48.90 after the company posted stronger-than-expected third-quarter earnings and revenue.

  • General Motors (GM) said its global sales rose 4.6 percent to more than 7.25 million in the first nine months of the year, as strong third-quarter demand in the U.S. and China helped offset declines in Europe and South America. The stock rose 1.5 percent to $35.64.

  • Ariad Pharmaceuticals (ARIA) rose 11.4 percent to $4.50 after a JPMorgan analyst said recently disclosed side effects of Ariad's cancer pill Iclusig may not hurt sales as much as investors fear.

  • Stanley Black & Decker (SWK) shares fell for a second session Thursday, after the tool company lowered its projections for the year. Shares fell 3.1 percent to $74.37, after plunging 14 percent Wednesday.

  • Best Buy (BBY) climbed to a multiyear high after an Oppenheimer analyst lifted the consumer electronics retailer's rating to "Outperform" from "Perform" and boosted his price target on the stock to $50 from $36, on increased confidence in the company's turnaround strategy. Shares ended Thursday trading at $42.80, a gain of 2.9 percent.

What to Watch Friday:

  • The Conference Board releases leading indicators for September at 10 a.m. Eastern time.

These companies are scheduled to report quarterly financial results before U.S. markets open.

  • General Electric (GE)

  • Honeywell International (HON)

  • Morgan Stanley (MS)

-Compiled from staff and wire reports.