NEW YORK (AP) — A surprisingly strong housing report helped push the stock market up early Wednesday, even as weak earnings reports from Intel and IBM weighed on the Dow Jones industrial average.
A half hour after the opening bell, the Dow Jones industrial average dropped 9 points to 13,543, while the Standard & Poor's 500 index gained 4 points to 1,459.
The Nasdaq composite index rose five points at 3,106.
IBM reported sales late Tuesday that dropped below Wall Street's expectations. On a call with analysts, IBM's chief financial officer said the company faced “more challenging” market conditions in September, the final month of the quarter, as cautious customers and a weakening euro undercut its results. IBM stock sank $9.51 in early trading to $201.60.
Intel warned that sales of personal computers will likely remain weak during the holiday season this year. The chip-maker cut its revenue estimates for the year-end quarter when it reported results late Tuesday. Intel's stock dropped 49 cents to $21.86.
The Commerce Department said Wednesday that builders broke ground on building new single-family houses and apartments at the fastest pace since July 2008. Housing starts surged to an annual rate of 872,000 in September, far above estimates by economists.
“You might think it's a misprint,” said Dan Greenhaus, chief global strategist at BTIG, in a note to clients. But over the past year, housing starts have climbed by 43 percent.
“If there was any doubt that the housing market was undergoing a recovery, even a modest one in the face of the terrible 2008 decline, those doubts should be erased by now,” Greenhaus said.
The housing report helped push the yield on the 10-year Treasury note up to 1.78 percent from 1.72 percent late Tuesday. Better economic news usually sends traders out of safe assets like Treasurys.
For the week, the Dow is now up 1.6 percent and the S&P 500 is up 2.3 percent. The stock market shot higher Tuesday as earnings results from Mattel, Goldman Sachs, and Johnson & Johnson beat expectations.