Jan 23 - Summary: Dow suffers three-day slump as earnings, China data weigh; Microsoft tops forecasts on rising commercial sales; Starbucks hit by rise in online shopping; Data show modest economic growth continues. Conway G. Gittens reports.
The Dow takes the edge off of what could have been the worst day in five months but a combination of mixed corporate results in the U.S. and softer-than-expected factory data out of China still hurts. In the end, blue chips added one percent to a three-day slump and the rest of the market - down less than a full percent. After the bell, commercial revenues at Microsoft jumped 10 percent last quarter helping profits and revenues exceed analysts' forecasts. But the company- still quiet about who will take over for outgoing CEO Steve Ballmer. Starbucks blames weaker mall traffic due to the rise of online shopping for a slower-than-anticipated gain in North American same-store sales last quarter. Total revenues - slightly lighter than hoped, though profits beat forecasts. In an earlier report, sales continue to slide at McDonald's. The fast food giant posted its fifth straight quarter of underwhelming sales, blaming frigid temperatures in the U.S. for keeping customers away in the final months of the year. Sales were down around the world but McDonald's still topped profit forecasts. UnitedContinental shares fell after the airline's first quarter outlook overshadowed better-than-expected earnings. But Netflix soared 16 percent one-day after saying subscriber growth this quarter will be 11 percent higher than last year. As expected, IBM is selling its low-end server business to Lenovo. If completed the deal at $2.3 billion will be the biggest ever for a Chinese tech company. In the latest economic updates: First-time jobless claims saw a slight bump up last week... Existing home sales bounced back in December after a three-month drop, putting the finishing touches on the strongest annual sales gain in seven years. Meanwhile, a separate gauge of future economic activity edged higher. European markets were caught up in the same malaise as the U.S. despite a pick-up in that region's biggest economy - Germany.