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Stock Market News for Jan 23, 2020

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IBM’s upbeat quarterly earnings results helped the tech-laden Nasdaq as well as the broader S&P 500 end in the green. However, the Dow ended in the negative territory, dragged down by one of its blue-chip components Boeing.

The Dow Jones Industrial Average (DJI) fell 9.77 points or 0.03%, to close at 29,186.27 and the S&P 500 rose 0.96 points or 0.03% to close at of 3,321.75. While, the Nasdaq Composite Index closed at 9,383.77, adding 12.96 points or 0.1%. The fear-gauge CBOE Volatility Index (VIX) increased 2.1% to close at 13.18. Advancing issues outnumbered declining ones for a 1.36-to-1 ratio on the NYSE and a 1.27-to-1 ratio on the Nasdaq favored decliners.

How Did the Benchmarks Perform?

The Dow was weighed down as The Boeing Company BA, whose shares dropped 1.4% due to renewed concerns over the 737 Max. Shares of Apple Inc. AAPL, meanwhile, gained 0.4% to hit an all-time high. Seven out of 11 major sectors of the S&P 500 ended in green. While the energy sector lagged, strong Q4 earnings pushed the tech sector high. Overall, the S&P 500 index recorded 108 new 52-week highs whereas two new lows. And the Nasdaq recorded 154 new highs and 23 new lows.

Strong Q4 Earnings from IBM Push Tech Stocks

International Business Machines Corporation’s (IBM - Free Report) better-than-expected performance lifted the overall technology sector.

On Wednesday, IBM reported fourth-quarter 2019 non-GAAP earnings of $4.71 per share surpassing the Zacks Consensus Estimate by 0.4%. Revenues from Red Hat (acquired on Jul 9, 2019) in the fourth quarter rallied 24%, helping IBM containerized software and accelerate service engagement. Additionally, revenues from Cloud & Cognitive Software segment rose 8.7% year over year to $7.2 billion. (Read More)

Shares of IBM, a Zacks Rank #3 (Hold) rose 3.4% on Wednesday. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Separately, Netflix, Inc. NFLX reported fourth-quarter 2019 earnings of $1.30 per share, surpassing the Zacks Consensus Estimate by 150% after the market closed on Tuesday. Tax adjustments owing to final regulations on certain aspects of the 2017 U.S. tax reform issued by the U.S. Treasury boosted earnings. The screening platform added 8.76 million paid subscribers globally, which decreased 0.9% year over year but was better than management’s guidance of 7.60 million. (Read More)

China taking Steps to Control Coronavirus

The outbreak of Coronavirus have wreaked havoc in China, with more than 500 confirmed cases and 17 fatalities so far being reported by China’s National Health Commission. However, China is taking actions to contain the respiratory virus and obstructing the pandemic that may affect global economic growth. Chinese Administration has cut off travel in and out of Wuhan.

Committee members at the World Health Organization is divided on whether to declare the coronavirus a public health emergency of international concern or not. On the other hand, President Donald Trump expressed his concern for the crisis and said he trusts Chinese President Xi Jinping will deal with the situation. Additionally, Trump mentioned that everything is “totally under control” in the United States as the Centers for Disease Control and Prevention said the patient diagnosed with “poses little risk” to the public.

Existing Home Sales Soars

According the National Association of Realtors data on Jan 22, sales of previously owned home rose 3.6% in December from the previous month to an annual rate of 5.54 million. This figure is above the November’s value of 5.35 million and surpassed the consensus estimate of 5.43 million. Existing home sales is boosted by rush in sales of multi-family housing and single-family homes.

Gains in December were led by 5.7% rise in sales in the Northeast region followed by 2.2% rise in the South. Additionally, second-home buyers purchased 17% of homes in December, up from 15% in December 2018. (Read More)

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