IBM weighs on the Dow; Nasdaq and S&P gain ground

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Oct 21 (Reuters) - The Dow was weighed down on Thursday by a collapse in IBM (IBM.N) shares after a disappointing quarterly report, but the Nasdaq gained and the S&P 500 index (.SPX) touched a record high with help from high-profile stocks such as Tesla Inc (TSLA.O).

After hitting an intraday record on Wednesday the Dow pulled back, with IBM tumbling after missing Wall Street estimates for quarterly revenue as orders in one business segment declined ahead of a spinoff next month. read more

The benchmark S&P clocked its seventh straight session of gains and of its 11 major industry sectors consumer discretionary (.SPLRCD) was the biggest percentage gainer during the session while energy stocks (.SPNY) were declining the most as crude oil futures fell on concerns about demand. read more

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"For the most part you're dealing with a slightly risk-off day with people going back to more defensive sectors" including big technology companies, said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.

"You're seeing oil down a little bit today so potentially there's some global growth concerns. You're seeing some inflation concerns as well."

However, the CBOE Volatility index (.VIX), also referred to as Wall Street's fear gauge, hit its lowest point since early July during the session.

This suggests that investors do not see a big decline or upswing for stocks ahead despite concerns about supply-chain problems increasing costs, according to Shawn Cruz, senior market strategist at TD Ameritrade.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 20, 2021. REUTERS/Brendan McDermid

"The market may be saying the supply-chain issues that are driving up costs are going to be transitory because markets are discounting mechanisms they take what is expected that happen in the future, and assign a price right now," Cruz said.

Cruz also pointed to earlier data showing that the number of Americans filing new claims for unemployment benefits dropped to a 19-month low last week, pointing to a tightening labor market. read more

According to preliminary data, the S&P 500 (.SPX) gained 13.32 points, or 0.29%, to end at 4,550.83 points, while the Nasdaq Composite (.IXIC) gained 93.82 points, or 0.62%, to 15,215.50. The Dow Jones Industrial Average (.DJI) fell 7.38 points, or 0.02%, to 35,601.96.

Analysts were expecting S&P 500 third-quarter earnings to rise 33.7% year-on-year, with about 100 company reports in so far, according to the latest data from Refinitiv.

Tesla was the Nasdaq's biggest boost during the session as investors digested the electric car maker's upbeat earnings, despite a supply-chain warning. read more

American Airlines (AAL.O) rose after the company posted a smaller-than-expected quarterly loss, while Southwest Airlines Co (LUV.N) fell after it said it expected current quarter profit to remain elusive.

HP Inc (HPQ.N) gained as brokerages raised their price targets on the stock after the personal computer and printer maker forecast upbeat fiscal 2022 adjusted profit and raised its annual dividend.

(This story corrects closing index levels of Dow, S&P 500 and Nasdaq, paragraph 10.)

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Reporting by Shreyashi Sanyal and Devik Jain in Bengaluru, Sinéad Carew in New York Editing by Arun Koyyur and Matthew Lewis

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