Strong numbers from IBM had the tech sector leading the Dow Jones Industrial Average higher Tuesday morning by more than 1%, to over 12,510, going into the second week of earnings season. Investors shook off the gloomy economic news from around the globe and the still-unresolved fight in Washington to raise the debt ceiling and avoid a U.S. debt default to focus on better earnings from corporate America.
IBM (NYSE:IBM) reported stronger-than-expected earnings after the bell Monday, sending Big Blue up more than $6.20, about a 3.55% increase, to around $181.50. Trading well above its 20-, 50 and 200-day moving averages, IBM has a relative strength index of 74.85. When the relative strength index rating of a stock hits 70, it is considered to be overbought.
Intel (NASDAQ:INTC) also was trading more than 2% higher at about $22.75, picking up almost 50 cents per share in morning activity. Intel, which will report Q2 earnings tomorrow, is trading above its 20-, 50- and 200-day moving averages. The three most recent analyst ratings for Intel have been a “neutral” and two downgrades, all within the past 45 days.
Reporting stronger earnings from global sales had Coca-Cola (NYSE:KO) up more than 2.6% to about $68.90, a gain of more than $1.75. The consumer giant has a relative strength index rating of 61.92 and is trading above its 20-, 50- and 200-day moving averages.
Providing ballast was Bank of America (NYSE:BAC), which reported earnings of a 90-cent loss per share. Bank of America is the worst performing stock on the Dow Jones Industrial Average for 2011. Losses from acquiring Countrywide Credit, the mortgage giant, continue to drag the shares down. New capital requirements from Basel III also will force Bank of America to develop a $50 billion cash cushion, limiting what can be paid out in dividends or share buybacks to raise the stock price.
Despite reporting strong earnings, Johnson & Johnson (NYSE:JNJ) fell thanks to recall costs that cut into profits, dragging the drug maker about 50 cents to around $66.60, more than a 0.72% decline. Johnson & Johnson is trading above its 50- and 200-day moving averages.
3M Company (NYSE:MMM) was trading lower by about 80 cents at around $93.80, falling by more than 0.85%. The stock is down more than 2% for the week as a recent note from Bank of America/Merrill Lynch questioned the margins and share price level for the company. 3M is trading below its 20-day moving average, but above its 50- and 200-day moving averages.
Johnathan Yates did not own any of the aforementioned stocks as of this writing.
