Dow, S&P 500 Decline But Post Gains for the Week
January 22 2021 - 5:55PM
Dow Jones News
By Joe Wallace and Akane Otani
U.S. stocks wobbled Friday but managed to post weekly gains,
lifted by shares that rallied on strong quarterly reports.
Investors were encouraged this week by a solid start to the
corporate earnings season, with companies from Netflix to Morgan
Stanley reporting better-than-expected results.
Although stock momentum appeared to fade Friday, with both the
S&P 500 and Dow Jones Industrial Average retreating from
records set earlier in the week, analysts said they believe the
market has potential to keep climbing as long as earnings continue
to show companies are weathering the coronavirus pandemic.
Next week, several technology-driven companies, including
Facebook, Apple and Tesla, are set to report results.
"With a lack of new ammunition, people are simply stopping off,"
said Lars Skovgaard Andersen, investment strategist at Danske Bank
Wealth Management.
The Dow Jones Industrial Average fell 179.03 points, or 0.6%, to
30996.98 on Friday and rose 0.6% for the week.
The S&P 500 slipped 11.60 points, or 0.3%, to 3841.47 and
climbed 1.9% for the week.
The Nasdaq Composite erased initial losses to end up 12.15
points, or 0.1%, to 13543.06. It posted a 4.2% weekly gain.
Shares of International Business Machines fell $13.04, or 9.9%,
to $118.61 after the company reported a 4.6% decline in revenue in
2020 but pledged to return to revenue growth this year.
GameStop soared $21.98, or 51%, to a record close of $65.01.
Strategists suggest the move was fueled by individual investors
attempting to squeeze short sellers out of their positions.
Paint maker PPG Industries fell $5.71, or 4%, to $137.82 after
saying its sales volumes fell in the fourth quarter.
Railroad company Kansas City Southern gained $4.59, or 2.2%, to
$217.58 after predicting it would deliver double-digit revenue
growth in 2021.
Meanwhile, stocks broadly retreated in overseas markets and oil
prices dropped in the midst of concern that coronavirus
restrictions were crimping demand for crude. Surveys of purchasing
managers in Europe showed that high coronavirus rates and
government curbs were increasing the risk of a second recession
since the pandemic struck.
The pan-European Stoxx Europe 600 index fell 0.6%, led lower by
energy companies and travel-and-leisure firms, whose profits are
closely tied to the fortunes of the economy.
Brent-crude futures, the benchmark in international energy
markets, lost 1.2% to $55.41 a barrel.
Political uncertainty pressured assets in Italy, where the
benchmark FTSE MIB index dropped 1.5% after a local newspaper
reported that Prime Minister Giuseppe Conte was considering a snap
election. Mr. Conte is under pressure to strengthen parliamentary
support for his government, a task that appears increasingly
difficult, raising the prospect of fresh elections in the
spring.
The probability of an election "has likely risen in the past few
days, and markets are discounting it," said Francesco Pesole,
foreign-exchange strategist at ING Groep.
In Asia, Hong Kong's Hang Seng Index ended 1.6% lower after a
local newspaper reported that the city would place tens of
thousands of people in lockdown to control Covid-19. China's
Shanghai Composite fell 0.4%.
Mr. Andersen said he was closely watching outbreaks of
coronavirus in China and Hong Kong, after many Asian economies
rebounded quickly from the pandemic last year.
"It is of course a risk that this locomotive in Asia could be
hurt by this, but we think they have it under control," he
said.
Write to Joe Wallace at Joe.Wallace@wsj.com and Akane Otani at
akane.otani@wsj.com
(END) Dow Jones Newswires
January 22, 2021 17:40 ET (22:40 GMT)
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