Midday Market Update: U.S. Indices Reverse Gains

By Jennifer Yousfi
Managing Editor

A fresh round of earnings reports dragged on U.S. stocks today (Thursday).

At midday in New York, the blue-chip Dow Jones Industrial Average Index was down 40.87 points (-0.32%), to trade at 12,578.40. The tech-laden Nasdaq Composite Index dropped 20.58 points (-0.88%), to reach 2,329.53. And the broader Standard & Poor's 500 Index decreased 6.31 points (-0.46%), to hit 1,358.40.

Most sectors were down, with the transportation sector (down 1.31%) posting the largest decline.

"Analysts are expecting a pretty dour earnings season, and so are portfolio managers," Charles Reinhard, director of portfolio strategy at Neuberger Berman, a unit of Lehman Brothers Holdings Inc. (LEH) that manages $129 billion, said in a Bloomberg Television interview. "The market is discounting a lot."

Pharmaceutical firm Pfizer Inc. (PFE) dropped after announcing a 19% drop in first quarter profits as generic drugs continue to take a hit on the drug giant's bottom line.

But blue-chip technology stock, International Business Machines Corp. (IBM), gained after the Dow component announced a 26% increase in first quarter profit, beating analyst estimates, and boosted its outlook for full-year 2008.

"IBM beat revenue and earnings expectations substantially with strength across the board," American Technology Research Analyst Shaw Wu told MarketWatch. "We find this quite impressive in light of the tough economic environment."

In overseas markets earlier today, Japan's Nikkei 225 Index gained 1.9% with an increase of 252.17 points to close at 13,398.30. Hong Kong's blue-chip Hang Seng Index rose 1.6% with a 380.61-point increase, to close at 24,258.96.

In Europe, most major bourses were down, with London's FTSE 100, Madrid's IBEX 35 and the Frankfurt-based DAX all posting losses. Only the Paris-based CAC40 managed to eke out a slight 7.04-point gain.

At midday, the dollar had gained ground against the euro (up 0.251%) and the yen (up 0.778%), but lost ground against the pound sterling (down 0.811%).

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