IBM's improved outlook lifted the DJIA Friday, but the broader market struggled as investors showed fatigue after a strong week on Wall Street. The DJIA rose 32.12 points to close at 8743.94, the Nasdaq added 1.58 points to close at 1886.61 and the S&P500 closed 0.36 points lower at 940.38.
Bank of America reported a profit of 33 cents per share, down from 72 cents a year ago, but five cents more than analysts were expecting. The stock fell 2 percent. Citigroup reported a second quarter profit of 49 cents per share, surprising analysts who were looking for a loss of 37 cents. Citigroup lost 55 cents a year ago. The stock ended little changed.
CIT Group bounded 71 percent on reports that it is in talks with JPMorgan Chase and Goldman Sachs as it tried to avoid a bankruptcy filing. The stock fell 71 percent after the company said it won't receive a government bailout, raising fears the company could collapse. CIT helps fund as many as 1 million small businesses, but a collapse of the company is not seen as a risk to the broad financial system.
IBM reported higher quarterly earnings that topped estimates on lower revenue that missed forecasts. IBM also said full year earnings would come in at $9.70 per share versus a forecast of $9.20 per share.
Google reported higher quarterly earnings late Thursday that topped estimates, largely due to cost cutting.
The company also reported tepid revenue growth because of slowing ad sales. The stock fell 2.8 percent Friday.
General Electric reported earnings of 26 cents per share, versus forecasts for 23 cents per share. GE lost 54 cents a year ago.
In economic news, June housing starts rose to a 582,000 unit annualized rate from a revised 562,000 in May. Economists expected starts would come in at a 530,000 unit annualized rate. Building permits rose to a 563,000 annualized rate in June versus a revised 518.000 unit rate in May. Economists expected a 524,000 unit rate.
Treasury prices slumped, raising the yield on the 10 year note to 3.64 percent from 3.57 percent.
In currency trading, the dollar gained against the euro and the Yen.
US light crude for August delivery rose $1.53 to close at $63.56 a barrel on NYMEX.
COMEX gold for August delivery rose $2.10 to close at $937.50 an ounce.
The Tokyo Stock exchange is closed today.
UK stocks closed higher on Friday, as oils, miners and banks all rallied, with traders cheering better than expected corporate results from the US. The FTSE100 closed 26.91 points higher at 4388.75, its biggest weekly rise since early January. Citigroup and Bank of America posted consensus beating second quarter earnings, following results from IBM, Intel, Goldman Sachs and JPMorgan Chase. Mining stocks added the most points to the index as metal prices firmed, with investor confidence growing. Eurasian Natural Resources was the biggest blue chip gainer, up 5.8 percent, with Xstrata, Rio Tinto, Antofagasta, Anglo American and Kazakhmys adding between 1.6 and 4.3 percent. Vedanta Resources rose 4.2 percent after the company said it planned to expand to steel manufacturing with a partner and boosted as Deutsche Bank lifted its price target on the company to 1440 pence from 1419 pence.
Energy stocks rose as crude prices jumped above $63 a barrel. BG Group, BP, Cairn Energy and Royal Dutch Shell added between 0.6 and 1.7 percent. Tullow Oil rose 2.8 percent, helped by Panmure Gordon starting coverage on the stock with a buy rating and 1150p target price. Banks were also in positive territory, buoyed by strong earnings from the US. Standard Chartered, HSBC and RBS rose 0.7-2 percent.
British Airways climbed 3.9 percent, as the market responded well to plans by the airline to raise around £600m through a combination of bondholder debt and bank credit. BA also reported an operating loss of £100m for the three months ending June 30, but analysts said this was better than feared.
Severn Trent fell 1.3 percent as Morgan Stanley cut its recommendation on the water company to underweight from equal weight.
A broker downgrade also weighed on Bunzl off 2.5 percent, as Banc of America Merrill Lynch downgraded its stance on the firm to neutral.
Invensys fell 1.3 percent, as it said reduced volumes in its short cycle products would impact first half performance.
GlaxoSmithkline and AstraZeneca fell 0.8 and 0.5 percent respectively, despite UBS saying it expects the latter's earnings to bear brokerage forecasts.