By Saumya Vaishampayan
The Dow Jones Industrial Average rose Wednesday, boosted by
stronger-than-expected results at Walt Disney Co.
The Dow gained 45 points, or 0.3%, to 17711.
Walt Disney's shares rallied 8% and contributed about 48 points
to the Dow's overall gain. The Dow is a price-weighted index which
tends to be influenced by pricier components such as Disney.
Action was muted on other benchmark indexes. The S&P 500
fell three points, or 0.1%, to 2047, while the Nasdaq Composite
Index added one point to 4728.
Stock-market action has been choppy in recent sessions. The Dow
has moved by more than 1% in either direction in the six sessions
ended Tuesday.
Traders said stock moves in recent weeks have been driven by
bets on indexes rather than on individual stocks. That comes amid
an increased focus on moves in oil prices and currencies, as well
as political developments overseas, such as the new Greek
government's talks with its creditors, that are overshadowing
fourth-quarter earnings, they said.
"It seems like there's an inordinate amount of uncertainty in
the world, " said Michael Fredericks, portfolio manager of the
BlackRock Multi-Asset Income Fund, which has $10.2 billion under
management. "It's hard to have a lot of conviction."
Crude-oil futures tumbled 6.8% to $49.47 a barrel, following
four straight sessions of gains. Energy stocks on the S&P 500
fell 1.4%, marking the biggest sector decline.
The euro fell slightly against the dollar, trading at $1.1422
versus $1.1480 on Tuesday. For the year, the euro has declined 5.6%
against the dollar. The broad strength in the U.S. dollar over the
last several months and weak growth overseas have helped weigh on
earnings for multinationals.
"Currency instability is typically not good for the market, and
we're seeing that reflected in some companies' earnings," said Eric
Slover, an equity strategist at Barclays. In general, large swings
in currencies tend to result in more companies missing revenue
expectations, he added.
Investors continued to watch international developments,
especially in Greece. Greece's new leaders are trying to reach an
agreement about the country's hefty debt pile. European stocks
rose, with France's CAC 40 up 0.4% and Germany's DAX 30 gaining
0.2%.
China's central bank on Wednesday cut the amount of deposits set
aside by commercial banks in case of financial trouble, taking a
major step to boost bank lending. The move is part of a continued
effort to kick-start growth.
"We're in a period where the market is really thrashing around,"
said Jeff Morris, head of U.S. equities at Standard Life
Investments. "It has to do a balancing act between those portions
of the U.S. economy showing genuine strength and recovery and
international influences," such as global growth concerns, he
added.
Back in the U.S., consumer discretionary stocks rose the most on
the S&P 500, up 0.9%.
Mr. Fredericks of BlackRock said he's attracted to sectors of
the stock market that could benefit from increased consumer
spending, such as some retailers and auto companies. But overall,
he said he has reduced stock exposure in his fund this year amid
increased international headwinds, high U.S. valuations and a
slowdown in earnings growth.
Health-care stocks on the S&P 500 fell 1.1%. Merck & Co.
said its sales fell in the fourth quarter, pressured by a stronger
U.S. dollar and patent expirations. Shares slipped 3.1%.
Car maker General Motors Co. said fourth-quarter profit surged
91%, beating analyst expectations. The company said it plans to
boost its dividend starting in the second quarter. Shares rose
5.8%.
Staples Inc. agreed to buy Office Depot Inc. for $6.3 billion .
The two companies have roughly 4,000 stores and they projected
annual sales of more than $39 billion. Shares of Staples fell 11%,
while those of Office Depot added 0.9%.
In economic news, private payrolls increased by 213,000 in
January, according to a report compiled by payroll processor
Automatic Data Processing Inc. and forecasting firm Moody's
Analytics. Economists surveyed by The Wall Street Journal had
expected payrolls to increase by 240,000.
Still, the overall employment trend remains positive, investors
said.
"The economy is expanding, the private sector is adding jobs,
and that's good news" for stocks, said Matthew Kaufler, who
oversees about $2 billion as a portfolio manager at Federated
Investors. "With the economy on firmer footing, inflation
expectations subdued, corporations returning capital aggressively
to shareholders, those all point to an attractive environment for
equities," he added.
The ADP report is often viewed as an indicator for Friday's
closely watched jobs report, which is expected to show the economy
added 237,000 jobs in January, according to economists surveyed by
The Wall Street Journal.
In other markets, gold futures rose 0.3% to $1264.40 an
ounce.
Treasury prices fell, pushing the yield on the 10-year note up
to 1.818% from 1.781% on Tuesday.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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