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AmEx boosts Dow but Intel a drag

Friday, Jan 17, 2014 - 02:12

Jan. 17 - Summary of business headlines: Stocks end mixed with American Express leading blue chips higher but Intel and General Electric holding back equities; Industrial production hits 3-1/2 year high; Housing starts frozen by December chill; Consumer sentiment slips. Conway G. Gittens reports.

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The Dow climbs higher as American Express saves the day overshadowing the influence of Intel and General Electric. Blue chips climbed 41 points but the rest of the market was under pressure for the second day. The Dow finally has its first up week for the year and the Nasdaq tacked on a weekly gain of half a percent. Rounding up economic news: Industrial production in the U.S. rose at its fastest pace in 3-1/2 years... Groundbreaking for new homes dropped almost ten percent during a cold December, but the decline was smaller than economists anticipated. And consumer sentiment dipped in early January, with low and middle income households concerned about jobs and salaries. Cary Leahey of Decision Economics says the economic outlook is good, but not good enough. SOUNDBITE: CARY LEAHEY, SENIOR ADVISER AND CHIEF U.S. ECONOMIST, DECISION ECONOMICS (ENGLISH) SAYING: "First, I think that the deleveraging cycle is pretty much over for the typical household. Not that they aren't cash strapped, but they've dealt with their excessive debt burdens they took on before the crash. Secondly, I don't look for much of an adverse move in oil prices. Thirdly, I look for a better attitude by business regarding hiring. And, fourthly, and perhaps most importantly, a significant reduction in the drag from the federal and state and local governments on the economy. That all should be relatively supportive, and, assuming no blow-ups overseas, I think you have a shot at a three handle of GDP growth for the whole year." Shifting to earnings: General Electric posted a slightly better-than-expected rise in revenues thanks to sales of oil pumps and jet engines. United Parcel Service delivered a fourth-quarter warning, saying a late surge in online shopping caught the company off guard, resulting in higher costs. Morgan Stanley posted stronger-than-expected fourth-quarter results, even though legal bills resulted in a sharp fall in profits. Looking at market reaction: GE fell more than 2 percent. UPS lost less than a percent and Morgan Stanley rallied more than 4 percent. Other notables: American Express jumped 3.6 percent one-day after releasing strong quarterly results. But shares of Intel plunged right off the bat after missing earnings one day earlier. Stocks rallied in Europe on expectations of a pick-up in global growth.

AmEx boosts Dow but Intel a drag

Friday, Jan 17, 2014 - 02:12

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