S&P 500 ekes out another small gain; IBM slumps

Published on NewsOK Modified: January 22, 2014 at 3:51 pm •  Published: January 22, 2014

NEW YORK (AP) — The Standard & Poor's 500 index eked out its second small gain of the week Wednesday as investors pored over the latest earnings reports.

Norfolk Southern climbed after the railroad company said its fourth-quarter profit rose 24 percent, better than Wall Street analysts had forecast. TE Connectivity, an electronics company, was the biggest gainer in the S&P 500 after its earnings beat analysts' expectations and the company posted a strong earnings outlook for the second quarter.

But there were also some high-profile disappointments.

IBM fell after the computing company reported lower-than-expected revenue in the period. AMD slumped after the chipmakers' first-quarter revenue outlook rattled investors.

Companies are still increasing their earnings and are forecast to log record quarterly profits for the period, but much of the improvement in recent years has come from cutting costs. As the economy strengthens, investors are increasingly looking for evidence that companies can increase revenue.

"There's not a lot of cost left for companies to squeeze out," said Andy Zimmerman, chief investment strategist at DT Investment Partners, an investment advisor.

The S&P 500 index rose 1.06 point, or 0.1 percent, to 1,844.86. The index traded within a range of just six points on Wednesday. After a small gain on Tuesday, the index is six points, or 0.3 percent, higher for the week.

The Dow Jones industrial average fell 41.10 points, or 0.3 percent, to 16,373.34. Most of the Dow's losses came from IBM's slump. The computer service company's stock fell $6.18, or 3.3 percent, to $182.25.

In other trading, the Nasdaq composite climbed 17.24 points, or 0.4 percent, to 4,243.

Among the day's winners, TE Connectivity jumped $3.70 or 6.6 percent, to $60 after its earnings report. Norfolk Southern climbed $4.23, or 4.8 percent, to $92.94 after the rail company said its fourth-quarter profit rose 24 percent.

Despite the lackluster start to the year, most investors see no cause to call an end to the stock market's rally just yet. The S&P 500 is down 0.2 percent in 2014 after a gain of almost 30 percent last year.

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