Stocks today continued higher as both the Dow and NASDAQ showed strength. At the close the Dow gained 66 points to 21,640. Trading volume was higher and today was encouraging because the Dow was able to overcome weak earnings from IBM which is a big component of the index.
IBM, (pronounced “ibum” by Jethro Bodine of Beverly Hillbillies fame) announced Q2 earnings which resulted in a big drop in share value as the company posted its 21st straight quarterly revenue decline. Revenue was down 5% and net income grew 1%. This company is losing ground to everyone from Amazon to Microsoft. IBUM shares hit a 52 week low.
Morgan Stanley reported stellar earnings sending shares higher. Revenue was up a sizzling 12% while net profits grew 16%. Both top and bottom lines beat guru estimates due to strong revenue in the wealth management business which has grown substantially since Morgan bought Smith Barney after the 2008 financial crisis.
The US housing markets rebounded in June as housing starts were up 8.3% after declining for the three prior months. The single family component of the index was up 10.3% while multi-unit starts showed a 12.9% decline. The mix of construction has shifted toward single family units which is a good sign for the economy since they add way more to GDP per start than do multi-unit starts.