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Stock Prices Fall Despite Strong Corporate Earnings

Strategic Insights

— 2 min read

The New York Stock Exchange (NYSE) experienced a decline in stock prices on January 21, as investors took profits despite a mostly strong showing of corporate earnings. The Dow Jones Industrials fell 71.83 points to close at 9,264.08 on high volume, with declines leading advances 1,932 to 1,127. The NYSE composite index dropped 8.06 points to 588.03 and Standard & Poor's 500-stock index fell 21.46 to 1235.16. The decline in stock prices was influenced by concerns over Brazil's economic problems and profit-taking in technology shares.

Key Takeaways:

  • The Dow Jones Industrials fell 71.83 points to close at 9,264.08 on January 21, marking a decline in stock prices despite strong corporate earnings.
  • The NYSE composite index dropped 8.06 points to 588.03, and Standard & Poor's 500-stock index fell 21.46 to 1235.16, showing a widespread decline in stock prices.
  • Declines led advances 1,932 to 1,127 on the NYSE, indicating a significant shift in market sentiment.
  • Popular stocks, including Lucent Technologies, America Online, and Philip Morris, fell in value, while others, such as IBM, reported strong earnings and rose in value.
  • Concerns over Brazil's economic problems and profit-taking in technology shares weighed on the market.
  • Analysts noted that numerous companies have yet to announce their quarterly earnings, and that this could impact the market in the coming weeks.
  • IBM reported a 9.5-percent rise in its fourth-quarter net income, beating analysts' forecasts.
  • The U.S. trade deficit in goods and services grew 14 percent to a seasonally adjusted $15.5 billion in November, fueled by changes in imports and exports.

Statistics:

  • The Dow Jones Industrials fell 71.83 points to close at 9,264.08 on high volume of 866 million shares.
  • Declines led advances 1,932 to 1,127 on the NYSE.
  • The NYSE composite index dropped 8.06 points to 588.03.
  • Standard & Poor's 500-stock index fell 21.46 to 1235.16.
  • The 30-year Treasury bond rose to 101 25/32, up from late Wednesday's 101 8/32.
  • The issue's yield, which moves in the opposite direction from its price, was 5.13 percent.
  • The dollar rose to 113.63 Japanese yen from late Wednesday's 112.88 yen.
  • The euro inched higher against the dollar, rising from just under $1.16 to just over $1.16.
  • The Bovespa fell 4.6 percent in Brazil, contributing to concerns over economic problems.
  • IBM reported a 9.5-percent rise in its fourth-quarter net income, with net income at $2.3 billion and revenue at a record $25.1 billion.
  • The U.S. trade deficit in goods and services grew 14 percent to a seasonally adjusted $15.5 billion in November.
  • Imports rose 0.4 percent to $94.1 billion, while exports fell 2 percent to $78.7 billion.

Sources:

  • UPI (January 21)
  • Commerce Department
  • First Call (Chuck Hill, director of research)
  • COMTEX (http://www.comtexnews.com)

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