Please ensure Javascript is enabled for purposes of website accessibility

What Happened in the Stock Market Today

By Demitri Kalogeropoulos - Apr 19, 2017 at 3:59PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

IBM and Intuitive Surgical stocks stood out as indexes dipped.

Stocks fell on Wednesday, with both the Dow Jones Industrial Average (^DJI 2.68%) and the S&P 500 (^GSPC 3.06%) indexes posting moderate declines.

Today's stock market


Percentage Change

Point Change




S&P 500



Data source: Yahoo! Finance.

Financial stocks saw some of the heaviest trading, and the Financial Select Sector SPDR ETF (XLF 3.69%) only slightly trailed the broader market with a 0.3% decrease. A 1% decline in gold prices, meanwhile, helped drive an 8% drop in the leveraged bullish bet on the precious metal, Direxion Daily Junior Gold Miners Bull 3X ETF (JNUG 7.09%).

As for individual stocks, IBM (IBM 2.62%) and Intuitive Surgical (ISRG 2.53%) attracted heavy investor interest following their quarterly earnings releases.

Outside the stock exchange in New York.

Image source: Getty Images.

IBM keeps shrinking

Shares of IBM weighed heavily on the Dow, falling almost 5%. The tech titan posted declining operating results for its fiscal first quarter as sales dipped 2.8% to $18.2 billion and net income dove 13% to $1.75 billion. Increases in its cognitive solutions segment failed to offset shrinking figures at its other key business divisions.

Specifically, IBM logged a 2.1% uptick in cognitive solutions revenue but endured a 2.5% decrease in the tech services and cloud unit in addition to declines in consulting services and systems hardware and software.

Gross profit margin fell nearly 4 full percentage points to 42.8% of sales and free cash flow declined to $1.09 billion. However, aggressive cost cuts helped limit the drop in operating income to just 1%. Research and development spending ticked up to $1.53 billion from $1.46 billion a year ago.

In a press release, CEO Ginni Rometty focused on encouraging demand that management is seeing in pockets of their services portfolio. "In the first quarter," Rometty said, "both the IBM Cloud and our cognitive solutions again grew strongly, which fueled robust performance in our strategic imperatives."

The company reaffirmed full-year guidance that calls for earnings of at least $11.95 per share. In the meantime, executives plan to continue plowing cash into strategic growth initiatives like cloud services and cognitive solutions to put the business back on the path to revenue growth.

Intuitive Surgical speeds up growth

Intuitive Surgical shares surged more than 6% to pass the $800 mark after the high-tech medical instrument specialist announced solid quarterly earnings results. Sales growth sped up to a 13% pace from the prior quarter's 12% as procedure growth hit a new high of 18%.

A surgeon at work.

Image source: Getty Images.

The company's systems revenue growth might appear soft at just 4%. However, executives explained that this figure was held down due to the timing of new product launches that deferred a chunk of revenue recognition. Focusing on system sales to account for that temporary shift shows plenty of evidence of robust demand given that Intuitive Surgical shipped 133 of its core da Vinci surgical platforms in the quarter, compared to 110 systems in the prior-year period.

"We are pleased with broad-based da Vinci procedure growth during the first quarter," CEO Gary Guthart said in a press release. Furthermore, the company is "encouraged by trends in key global markets and our U.S. general surgery business," Guthart added.

Looking forward, Intuitive Surgical aims to build on the strong procedure growth momentum it recently won. Given the sharp spike in the stock price lately, investors have to hope that the expansion pace stays robust and that Intuitive Surgical continues to book solid profit gains despite aggressive investments in research and development spending.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

International Business Machines Corporation Stock Quote
International Business Machines Corporation
$142.06 (2.62%) $3.62
Intuitive Surgical, Inc. Stock Quote
Intuitive Surgical, Inc.
$209.67 (2.53%) $5.17
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$31,500.68 (2.68%) $823.32
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
$3,911.74 (3.06%) $116.01
The Select Sector SPDR Trust - The Financial Select Sector SPDR Fund Stock Quote
The Select Sector SPDR Trust - The Financial Select Sector SPDR Fund
$32.34 (3.69%) $1.15
Direxion Shares ETF Trust - Direxion Daily Junior Gold Miners Index Bull 3X Shares Stock Quote
Direxion Shares ETF Trust - Direxion Daily Junior Gold Miners Index Bull 3X Shares
$41.52 (7.09%) $2.75

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.