* Poor IBM results weigh heavily on S&P, Dow
* Treasury prices down on weaker German govt debt
* Dollar holds on bets over Fed stimulus cut
* Sterling shines on expectations for UK rate hike
By Barani Krishnan
NEW YORK, Jan 22 U.S. stocks were little changed
on Wednesday, as investors played off a mixed bag of company
earnings, while the dollar held steady against most major
currencies ahead of next week's Federal Reserve meeting, where
another cut in stimulus is seen possible.
Treasuries prices fell and benchmark yields edged up from
five-week lows, with prices dragged lower by weaker German
On Wall Street, IBM missed revenue expectations for a fourth
straight quarter, driving down shares of the world's largest
technology services company by nearly 4 percent, making them the
biggest drag on the market.
Shares of Coach Inc, the luxury handbag maker, also
tumbled, stung by disappointing sales in North America.
"There has been little so far to excite the masses and it is
going to lead many to question. Can this market hang in there
with a flat earnings environment?" said Andre Bakhos, managing
director at Janlyn Capital LLC in Bernardsville, New Jersey.
The Dow Jones industrial average was down 36.92
points, or 0.22 percent, at 16,377.52. The Standard & Poor's 500
Index was up 1.34 points, or 0.07 percent, at 1,845.14.
The Nasdaq Composite Index was up 17.98 points, or 0.43
percent, at 4,243.74.
IBM lost 3.3 percent to $182.22, weighing heavily on
both the Dow and S&P 500. The company was hit in the latest
quarter by weakening demand, particularly in growth markets like
Coach tumbled 7 percent to $48.86, the worst performer on
the S&P 500, on declining North American sales and market share
in the handbag business to fast-growing rivals.
On the upside, both United Technologies Corp and
railroad company Norfolk Southern reported strong
Shares of United Technologies, the world's largest maker of
elevators and air conditioners, were up 0.8 percent at $115.92.
The company reported higher fourth-quarter profit that topped
Wall Street estimates, though revenue fell shy of expectations.
Norfolk Southern posted a 24 percent rise in quarterly
income, driving its shares up 4.4 percent at $92.61. The shares
had risen more than 6 percent earlier, helping the Dow Jones
Transportation average hit a record high.
An upgrade of the International Monetary Fund's world
forecasts lifted sentiment in global equities, keeping world
World stocks as measured by the MSCI world equity index
.MIWD00000PUS> edged up 0.07 percent.
The pan-European FTSEurofirst closed up 0.1 percent
at 1,347.05, leaving it just shy of a multi-year high touched on
Tuesday at 1,353.47. The euro zone's blue-chip STOXX 50
shed 0.1 percent to 3,151.27 points.
The dollar slipped against sterling and the Australian
dollar while holding against other major currencies, as
measured against a basket of currencies.
Investors expect the Fed, when it meets on Monday and
Tuesday, to make another $10 billion cut to its monthly
bond-buying program after last month's reduction brought its
monthly purchases of bonds to $75 billion.
The benchmark 10-year U.S. Treasury note was down 9/32, with
the yield at 2.8563 percent. The 10-year yield hit 2.818 percent
on Friday, its lowest level since Dec. 11, according to Reuters
Sterling hit a three-week high against the dollar and a
one-year high against the euro.
The pound rallied after a sharper-than-expected fall in UK
unemployment, to 7.1 percent, provided fresh proof of a
strengthening economy and bolstered speculation that a Bank of
England rate increase may not be too far off.
Minutes from the BoE's last meeting, released at the same
time as the data, showed policymakers now acknowledged
unemployment was likely to fall to the 7 percent threshold they
have set for reviewing the bank's policy, "materially earlier"
"It will certainly be the big challenge for Bank of England
Governor Mark Carney and the (Monetary Policy Committee) in
managing the forward guidance," said Michael Hewson, chief
strategist at CMC Markets. "What does he do when it does hit 7
percent? ... I think the only way is up for the pound."
Among commodities, oil climbed on expectations that
accelerating growth in industrialized economies would lift
demand. U.S. crude oil futures rose almost 2 percent to
$96.77 a barrel, its highest since Jan. 2.