July 17 - Summary: Intel, IBM and American Express announce after-the-bell revenues below consensus; Cost cuts help Bank of America weather bond market rout; Bernanke lifts Wall St. with flexibility pledge. GSK China exec blocked from leaving country. Conway G. Gittens reports.
There was an air of stability on Wall Street thanks to Federal Reserve Chairman Ben Bernanke. A choppy session ending with the Dow, S&P 500 and Nasdaq closing slightly higher. More on Bernanke in a minute but let's start first with earnings: After the bell, Intel cut its revenue forecast for the year with the personal computer market worse than the chip giant earlier predicted. Quarterly sales were weaker than hoped, but earnings hit the mark. IBM missed on sales too, but beat with earnings excluding special items. The company's full-year operating profit outlook - ahead of The Street's. At American Express - card spending was up but revenues were slightly below forecast. Profits were higher than anticipated. Meantime, Bank of America released much better-than-expected numbers hours before. Cost cuts offset weakness tied to last month's bond market upheaval. Back to the Fed now. Bernanke was on Capitol Hill for his twice-yearly chat with lawmakers, making it clear that policymakers are planning to slow bond purchases later this year, though that's not written in stone. Economist Greg Daco of IHS Global Insight: SOUNDBITE: GREG DACO, U.S. ECONOMIST, IHS GLOBAL INSIGHT (ENGLISH) SAYING: "I think he wanted to, you know, let markets know that in the end the Fed is continuously watching economic data, looking at how the unemployment rate is evolving over time and how inflation is evolving over time and based on its observations of the economic data it will act properly and that may mean tapering this year but it may mean not tapering until next year." Recent data though, suggesting sluggish growth. Economic activity remained at a modest to moderate pace in the past few weeks, according to the Fed's latest summary of economic conditions. And in a surprise, housing starts tumbled almost 10 percent in June, falling to a 10-month low. Finally, a new twist involving British drugs company GlaxoSmithKline. The company claims Beijing is blocking the head of GSK's China finance division from leaving the country, following accusations the drugmaker has bribed doctors and officials. The stock was up for the day - along with equity prices across Europe.