IBM propels stocks
Wall Street bounces after previous session's retreat as tech leader's earnings temper worries about banking and autos.
NEW YORK†(CNNMoney.com) -- Stocks rallied early Wednesday, bouncing after the previous session's steep decline, as a positive earnings report and forecast from IBM helped temper ongoing worries about the auto and banking sectors.
Robert Brusca, chief economist at Fact and Opinion Economics, said the markets were see-sawing from Tuesday's surprise sell-off.
"You would have thought that a new president, one that is greatly heralded and was very active even before he took office, would have heralded something more than that," said Brusca. "Maybe the markets were saying good-bye to (former President George W.) Bush."
"Today's market is best viewed as an unwind of yesterday's inexplicable sell-off," he said.
Earnings: Automaker General Motors (GM, Fortune 500) said that global sales fell 10.8% in 2008 - causing GM to fall behind Toyota as the world's leading seller for the first time. Nonetheless, shares gained almost 2%.
But tech bellwether IBM (IBM, Fortune 500) offered some good news. The company reported better-than-expected quarterly earnings after U.S. markets closed Tuesday and issued a 2009 profit outlook that topped Wall Street's expectations. Shares gained 7%.
On Wednesday, Abbott Labs (ABT, Fortune 500) matched earnings expectations for the fourth quarter, with profit of $1.06 per share, and slightly beat sales projections, with revenue of nearly $8 billion. The drugmaker's stock gained 2%.
Job cuts: The world's largest mining company, BHP Hilton (BHP), said that 6,000 workers would be laid off as a result of production cuts. Around 550 cuts will come from the United States. Shares inched higher.
The Swedish telecom giant Ericsson (ERIC) said it would cut 5,000 jobs in the attempt to save $1.2 billion in costs in 2009. About 1,000 of the job cuts will be in Sweden, where the company is headquartered. This was in spite of a strong fourth quarter for the company, with a 23% surge in sales. Ericsson shares jumped 14%.
Geithner hearing: Tim Geithner, President Obama's choice as Treasury secretary, will appear before the Senate Finance Committee for his confirmation hearing.
Geithner has spent six years as president of the Federal Reserve Bank of New York, but tax problems have clouded his nomination. (Full story)
World markets: Economic fears pressured stocks in Asia and Europe. Japan's Nikkei lost 2%. European indexes were mixed in afternoon trading.