IBM Takes Back Seat to Bank Woes
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IBM (NYSE: IBM) posted surprisingly strong earnings late Tuesday, but the company's earnings report could be overshadowed by growing worries over the dire condition of the banking sector.
IBM's fourth-quarter earnings of $3.28 a share were 25 cents better than expected. Sales declined 6% to $27.01 billion, about $1.1 billion below forecasts, but the company attributed the sales decline to currency fluctuations. Given an economy and financial sector in freefall, investors decided the results and Big Blue's strong full-year earnings guidance were good news, and they sent IBM shares 4% higher in late trading, recouping all of the day's 3.5% loss and then some.
But the rest of the market welcomed President Obama with the worst day for stocks since December 1, with the major indexes off 4-6%. The financial sector had one of its worst days in the 15-month bear market, with the entire bank index down 20% to a new low on dismal results from RBS (NYSE: RBS) and State Street (NYSE: STT).
IBM's results are just the start of a busy week for technology earnings reports, with Apple (NASDAQ: AAPL) and eBay (NASDAQ: EBAY) reporting on Wednesday and Nokia (NYSE: NOK), Google (NASDAQ: GOOG), Microsoft (NASDAQ: MSFT) and AMD (NYSE: AMD) on Thursday.
On a day that saw 83% of Nasdaq-listed stocks trade lower, Microsoft, Intel (NASDAQ: INTC), Comcast (NASDAQ: CMCSA), Marvell (NASDAQ: MRVL), Nvidia (NASDAQ: NVDA), Amazon (NASDAQ: AMZN) and Applied Materials (NASDAQ: AMAT) were among the names exceeding the Nasdaq's 5.8% loss.
On the NYSE, AMD, EMC (NYSE: EMC), VMware (NYSE: VMW) and Micron (NYSE: MU) lost 6.7% or more.
The Nasdaq tumbled 88 to 1440, the S&P 500 lost 45 to 805, and the Dow plunged 332 to 7949. Volume rose to 7.3 billion shares on the NYSE, and declined to 2.06 billion on the Nasdaq. Decliners led by a 32-4 margin on the NYSE, and 24-4 on the Nasdaq. Downside volume was 97% on the NYSE, and 96% on the Nasdaq. New highs-new lows were 9-157 on the NYSE, and 9-171 on the Nasdaq.