The Dow Jones Industrial Average (^DJI -0.11%) is up 77 points, or 0.51%, as of 12:50 p.m. EDT, bringing it within firing range of its all-time closing high of 15,409. The S&P 500 and the Nasdaq are also making gains this afternoon, up 0.72% and 0.58%, respectively. There's been little economic news today, which is a good sign that investors are buying stocks based on individual company results, rather than macro events that often have disproportionate effects on stocks.
The Dow has even managed to overcome the considerable drag of its heaviest-weighted component, IBM (IBM 0.59%), whose shares have lost 1.9% of their value after Goldman Sachs downgraded the stock and lowered its price target this morning. The analyst responsible for the move was Bill Shope, who said in a client note that IBM will experience more pressure in emerging markets, which IBM relies upon for about $17 billion in revenue as part of its five-year growth plan. The stock's rating was changed from "Buy" to "Neutral," while the price target was cut from $220 per share to $200 per share.
Alcoa (AA), which officially kicked off earnings season yesterday, is down 0.4% today. While the earnings announcement was by no means terrible, it also wasn't great. The company posted a loss of $119 million during the second quarter compared with a loss of just $2 million in the same quarter of last year. However, last quarter's loss included $195 million in restructuring costs, so when one-time special items are backed out, Alcoa posted earnings of $76 million, or $0.07 per share. Revenue, on the other hand, declined by 2% to $5.85 billion. The lower revenue and profit are likely the result of weak aluminum prices over the past few months; the metal lost 8% of its value on the London Metal Exchange during the quarter.
Shares of Verizon (VZ -0.74%) have declined by 0.4% this afternoon on little news. But over the past few months, the company has found itself constantly making news headlines. Verizon's potential buyout of Vodafone's stake in the companies' joint venture, its fight with AT&T for dominance of the American consumer, and Sprint's ongoing buyout saga have clouded Verizon's long-term outlook. But Verizon did recently finish its rollout of its 4G LTE network, which now covers more than 99% of those who once had Verizon's 3G service. Today's move lower is unexplainable, and investors shouldn't be too concerned with it, as the company is financially strong and continues to lead telecommunications companies into the next generation of service.
