Paced by a slew of strong earnings reports this morning, the Dow Jones Industrial Average (^DJI 0.40%) jumped nearly 1%, the most it has in a month, gaining 127 points to finish at 13,551. A positive industrial production report also helped lift markets, as well as whispers that Spain was closer to asking for a bailout.
Five Dow stocks reported earnings today -- three before open, two after the bell. Starting with the early reports, health care giant Johnson & Johnson's (JNJ -0.46%) profits shrunk by 7% from the same quarter a year ago; however, adjusted EPS grew modestly to $1.21 and topped Wall Street expectations by $0.04. Revenue of $17.1 billion slightly beat estimates as well, and the Tylenol maker raised its 2012 forecast. Investors responded by sending shares up 1.4%.
On the other side of the ledger, UnitedHealth Group (UNH 0.30%), the nation's largest health insurer and newest entry into the Dow, dropped 1.1% despite a 23% increase in quarterly profits. Earnings per share of $1.50 came in well ahead of estimates of $1.34, and the company raised its guidance. However, management cautioned that 2013 growth may not meet expectations because of the sluggish economy and the effects of the Affordable Care Act.
Beverage giant Coca-Cola (KO), meanwhile, followed UnitedHealth downward, falling 0.6% after posting just a 1% gain in revenue. Actual unit volume grew by 4%, but currency exchange rates were responsible for the slower sales increase. EPS of $0.51 matched the Street's consenus.
Finally, the two companies to report after-hours fell sharply in trading after the bell.
Intel (INTC -9.20%) had been the biggest gainer on the day, rising 2.9% during the trading session, but lost all those gains and more, falling 3.5% after the bell. Perhaps unsurprisingly, considering Hewlett-Packard's recent warning, the top chipmaker's profits fell 14% on slower PC demand. The Pentium maker also took a $500 million charge for excess production capacity, as fourth-quarter demand is expected to fall short of previous expectations. EPS topped estimates, but the weak outlook was enough to spook investors.
Fellow tech titan IBM (IBM -1.05%) also slipped 3.5% after-hours, following a gain of 1% during the day. Revenue in all of Big Blue's segments declined, and North American sales were especially weak, though sales in the BRIC countries rose 4%, or 11% excluding currency effects. EPS was in line with predictions.
Look for these disappointing reports to lead to an early morning hangover for the Dow tomorrow, though an earnings beat by Bank of America (BAC -0.21%), which reports before market open, could help reverse that trend.
