NEW YORK (AP) — U.S. stocks are rebounding Wednesday as strong results from Morgan Stanley and rising bond yields send banks and other financial companies higher. Carmakers and auto parts companies are rising, but investors are selling high-dividend companies as bond yields increase. Steep losses for IBM are dragging the Dow Jones industrial average lower.
KEEPING SCORE: The Standard & Poor’s 500 index gained 8 points, or 0.3 percent, to 2,350 as of 11:35 a.m. Eastern time. The Dow lost 8 points to 20,514 as IBM’s losses weighed on the blue-chip index. The Nasdaq composite jumped 45 points, or 0.8 percent, to 5,894 as technology companies climbed. The Russell 2000 index of small-company stocks rose 15 points, or 1.1 percent, to 1,376 after a late gain a day earlier.
Stocks mostly skidded Tuesday after weak earnings from a few key companies, especially health care products giant Johnson & Johnson and Goldman Sachs. Overall, analysts still expect good first-quarter results from publicly-traded companies, and that was mostly the case Wednesday morning. The price of gold, which has climbed steadily in recent weeks, fell almost 1 percent.
BANKS COME BACK: Wealth management and investment banking firm Morgan Stanley said its profit jumped in the first quarter as its stock and bond trading businesses made about twice as much money as they did one year ago. That continued what’s mostly been a strong first quarter for banks and other financial companies. Despite disappointing results from Goldman Sachs Tuesday morning, most financial firms have said their trading units did well in the first quarter, and they’re also benefiting from higher interest rates.
Morgan Stanley gained $1.19, or 2.9 percent, to $42.40. Elsewhere, Charles Schwab rose 55 cents, or 1.5percent, to $38.46 and Prudential climbed $1.31, or 1.3 percent, to $104.88. Bank of America added 33 cents, or 1.5 percent, to $23.04.
HIGH-TECH TROUBLE: Technology and consulting company IBM slumped after a weak sales report. The company reported $18.16 billion in revenue in the first quarter, and according to FactSet, that was more than $200 million below analysts’ estimates. IBM stock fell $8.11, or 4.8 percent, to $161.94.
BONDS: Bond prices fell, reversing most of their gains from a day earlier. The yield on the 10-year Treasury note rose to 2.22 percent from 2.17 percent. That helped banks but hurt high-dividend companies including utilities and real estate investment trusts.
SHIFT INTO DRIVE: Retailers of cars, auto parts, tires and rental cars climbed after a strong quarter from Genuine Parts. The auto and industrial parts distributor raised its profit forecast for the year, although it acknowledged its U.S. business has been weak. Stocks plunged earlier this month after automakers reported disappointing March sales, and some investors felt that was a warning sign about spending by consumers.
Genuine Parts jumped $3.45, or 3.8 percent, to $93.53 and AutoNation advanced $1.60, or 3.9 percent, to $43.15. CarMax picked up $1.69, or 3 percent, to $57.30. Ford and General Motors both rose about 1 percent and Tesla gained almost 2 percent.
ROBOT ROLL CALL: Robotic surgery system maker Intuitive Surgical climbed after its profit and revenue came out ahead of analysts’ projections. The company said shipments of its da Vinci device and surgeries performed with it both jumped. The stock rose $53.81, or 7.1 percent, to $813.15.
ON THE LAM: Chip equipment maker Lam Research posted a bigger third-quarter profit than investors expected and slightly better sales. Its fourth-quarter forecast was much better than expected, and the stock gained $8.13, or 6.4 percent, to $135.56. That helped send technology companies higher.
CHOPPY CHOPPER SALES: Textron, which makes Cessna small planes and Bell helicopters, also disclosed lower-than-expected sales. Its stock gave up 83 cents, or 1.8 percent, to $46.51.
OTHER LEADERS: GE helped lead industrial companies higher as it gained 8 cents to $29.92. Shipping company FedEx rose $2.05, or 1.1 percent, to $185.56 while rival UPS rose 84 cents to $104.94. Basic materials companies rose behind gains for packaging companies WestRock, which added $2.44, or 4.8 percent, to $53.07 and International Paper, which rose $1.11, or 2.2 percent, to $52.56.
OIL: U.S. crude oil futures lost 27 to $52.14 per barrel in New York. Brent crude, used to price international oils, fell 28 cents to $54.61 per barrel in London.
CURRENCIES: The dollar rose to 109.05 yen from 108.42 yen. The euro edged down to $1.0711 from $1.0730.
OVERSEAS: British stocks continued to fall. The FTSE 100 slid 0.4 percent after a 2.5-percent plunge on Tuesday. Other major European indexes recovered modestly. In France the CAC-40 edged up 0.3 percent and Germany’s DAX gained 0.2 percent. In Japan the Nikkei 225 edged up 0.1 percent and the South Korean Kospi shed 0.5 percent. Hong Kong’s Hang Seng index fell 0.4 percent.
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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP
His work can be found at http://bigstory.ap.org/journalist/marley-jay
