Thursday, October 19, 2017
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Market Digest Online THURSDAY, OCTOBER 19, 2017: he Dow Jones industrial average rose sharply on Wednesday, closing above 23,000 for the first time, after tech giant IBM reported better-than-expected quarterly results. The 30-stock index surged 160.16 points to 23,157.60, recording intraday and closing all-time highs. The index first broke above 23,000 on Tuesday, but closed just below the mark. The Dow traded above 23,000 just 76 days after first breaking above 22,000.

"All the economic data suggests we have more room to the upside," he said. "I wouldn't be surprised if we got to 24,000 by year-end," especially if we get tax reform."

Bank stocks also surged Wednesday, with SPDR S&P Bank exchange-traded fund (KBE) advancing 0.7 percent. Shares of Goldman Sachs and JPMorgan Chase rose 2.5 percent and 0.4 percent, respectively.

IBM posted adjusted earnings per share of $3.30 on revenue of $19.15 billion Tuesday after the close. Analysts polled by Reuters expected the company to report earnings of $3.28 per share on sales of $18.6 billion. The company's stock surged 9 percent and recorded its biggest one-day rise since January 2009.

"IBM turned in a solid quarter last night and we continue to believe the company will emerge from this transition a much stronger IT organization. Moreover, IBM's 4.1% dividend yield and modest valuation should attract more value investors," Drexel Hamilton analyst Brian White said in a note Wednesday.

This earnings season has gotten off to a good start, with 81 percent of companies that have reported beating on the bottom line, while 73 percent have topped sales estimates, according to Thomson Reuters I/B/E/S.

"The good news is the number of companies currently beating estimates, and the margin by which they are doing so, is running above what these same 52 companies have recorded, on average, over the past three years and their top-line revenue growth has accelerated more," said Nick Raich, CEO of The Earnings Scout, in a note.

"The bad news is the rate of 3Q 2017 vs. 3Q 2016 earnings growth has slowed from last quarter, but is still running well above trend," Raich said.

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