The Dow Jones Industrials (DJINDICES: ^DJI ) include 30 of the biggest and most influential companies in the world. Ordinarily, the average represents the performance of the entire U.S. economy, and given the multinational reach that most of its components have, a strong Dow usually corresponds to strong economic conditions worldwide. But because of the peculiar way the average is calculated, the Dow occasionally sees big moves owing solely to the action of a single stock: IBM (NYSE: IBM ) . Last night, IBM's earnings report sent the stock soaring, and because of its high share price, IBM's $11 per-share gain on the day translates to more than 80 points of upward pressure on the average. And with the Dow only up 50 points as of 10:45 a.m. EST, the average would actually be down on the day without IBM's influence. Indeed, the broader S&P 500 actually did fall in early trade.
IBM's 5%-plus rise came on the heels of a report in which the tech giant nudged up its estimate of 2013 earnings to $16.70 per share, topping what analysts were expecting from the company. As IBM has successfully moved its focus from hardware to more profitable software and services, it's been able to keep more of its revenue and improve margins. Continuing to do so will be essential if IBM wants to achieve its goal of $20 per share in earnings by 2015.
Elsewhere, Molycorp's (NASDAQOTH: MCPIQ ) woes continued, as the rare-earth metals producer gave a warning that its revenue and cash flow both for the fourth quarter of 2012 and the first half of 2013 would be lower than expected. Given delays in ramping up operations to full capacity at its Mountain Pass facility, Molycorp said the cash-flow crunch could amount to $250 million. Upon the announcement that the company will sell $300 million in stock and convertible bonds, concerns about dilution sent shares down more than 7.3%. Unless the prices of rare-earth metals start to improve, then Molycorp's problems could well continue indefinitely.
Finally, EZCorp (NASDAQ: EZPW ) soared more than 12% after beating estimates for revenue and profits for its fiscal first quarter. The pawn shop operator and payday-loan specialist had record sales in the quarter, and earnings per share hit the upper end of its anticipated target range. With growth initiatives coming especially from its Latin American operations, EZCorp is looking to reverse a downward trend that has emerged from the threat of increased regulation of its financial consumer services.
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