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IBM and GE Mask the Dow's Strength

Travis Hoium
April 19, 2013

All but six of the 30 Dow Jones Industrial Average (INDEX: ^DJI) components are higher today, but a quirk in the way the index is calculated has it slightly in the red. The Dow is a price-weighted index, which means that expensive stocks like IBM (NYSE: IBM) have an especially large impact on the index as a whole, so the stock's 8.1% loss today has cost the Dow more than 100 points. A broader look at stocks via the S&P 500 (INDEX: ^GSPC) shows the market making significant gains today: The index is up 0.75% near the end of trading.

IBM's huge drop was driven by a disappointing first-quarter earnings report. Revenue fell 5% to $23.4 billion, and non-GAAP net earnings per share rose 8% to $3 per share. This fell short of expectations, but IBM said some large orders didn