NEW YORK — The stock market is fulfilling predictions of an uneasy trek through second-quarter earnings season.
Stocks ended a choppy day Monday with a moderate rebound that sent the Dow Jones industrial average up 57 points. Analysts said the advance resulted in part from investors’ regaining their optimism about earnings. But that change in sentiment was fleeting: After the market closed, IBM reported revenue that fell short of expectations, and investors were back to selling in after-hours trading.
IBM did issue a more upbeat forecast for its 2010 earnings that in the past would have lifted stocks. But with investors increasingly on edge about signs of trouble in the economy, many decided not to share in IBM’s more confident view of the future.
“The market is caught up by this fear factor over how much the economy has slowed and what does it mean in terms of future earnings growth,” Peter Cardillo, chief market economist for Avalon Partners, said before the market closed.
Stocks fell across a variety of industries in after-hours trading. IBM was hit hard, and investors also punished Texas Instruments Inc. after the chipmaker matched but didn’t surpass analysts’ second-quarter revenue predictions.
Analysts have predicted that stock trading would be erratic throughout earnings season. Recent economic data have been disappointing, and investors are having a hard time trusting upbeat forecasts.
Investors managed to weather some bad news early Monday. The National Association of Home Builders said its confidence index sank to 14, its lowest level since March 2009.
The Dow rose 56.53, or 0.6 percent, to 10,154.43. The Standard & Poor’s 500 index rose 6.37, or 0.6 percent, to 1,071.25, while the Nasdaq composite index, lifted by a rally in tech stocks, rose 19.18, or 0.9 percent, to 2,198.23.
Stocks had fallen sharply Friday, taking the Dow down 261 points, after news of a drop in consumer confidence. That was a negative signal for the economy. Stocks also fell after big banks’ earnings had investors doubting whether financial-company profits would be curtailed in the future by new federal regulations.
Hundreds of companies will report earnings in the next few weeks. Today, Yahoo, Apple, Johnson & Johnson and PepsiCo report results. Goldman Sachs, which last week settled civil fraud charges with the government, will also report earnings.
