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A trader works on the floor at the New York Stock Exchange in New York, Friday, Dec. 28, 2012. Stocks were heading lower Friday, for a fifth day, on concern that Washington lawmakers will fail to reach a budget deal before a year-end deadline. (Seth Wenig/AP)
A trader works on the floor at the New York Stock Exchange in New York, Friday, Dec. 28, 2012. Stocks were heading lower Friday, for a fifth day, on concern that Washington lawmakers will fail to reach a budget deal before a year-end deadline. (Seth Wenig/AP)

Inside the Market

At the open: IBM rally keeps Dow afloat Add to ...

North American stock markets opened mixed, with the TSX slightly in the red as the Dow rose thanks to a 6 per cent jump in the shares of IBM, which accounts for about an 11 per cent weighting in th index.

Market players were kept busy absorbing a number of U.S. corporate earnings this morning and from last night, and were anxiously awaiting Apple Inc.'s latest quarterly results after today's closing bell.

In early trading, the S&P/TSX composite index was down 19 points, or 0.1 per cent, at 12,805. The S&P 500 was up less than a point, or 0.03 per cent, at 1,493. The Dow Jones industrial average was up 54 points, or 0.4 per cent, at 13,766. And the Nasdaq was up 11 points, or 0.4 per cent, at 3,155, getting a boost from Google, which rose nearly 6 per cent on better-than-expected earnings released late Tuesday.

So far, the fourth-quarter U.S. earnings season is shaping up quite well, with 75 per cent of the 84 companies in the S&P 500 that have released results prior to today exceeding their earnings projections, according to Bloomberg data. And as David Berman noted on Inside the Market on Tuesday, 63 per cent of companies in the S&P 500 have beaten expectations on sales. That marks a big reversal from the previous two quarters, when about two-thirds of companies missed sales expectations.

Still, stocks have been steadily racking up modest gains in recent weeks, and some market strategists are calling for a pullback, especially with U.S. budgetary matters not settled. The Republican-controlled House of Representatives early this afternoon will vote on a temporary debt-ceiling hike until May 19. It's widely expected to pass, postponing the threat of a debt default. If the vote doesn't go as expected, however, equities could head south. 

Overnight, Japanese stocks got whacked for a second day, with the yen rising against the U.S. dollar, as markets continued to react with disappointment over the Bank of Japan's policy overhaul on Tuesday.

The Nikkei lost more than 2 per cent, as the bank's promised "bold" moves didn't go as far as many market participants had hoped. It's shaping up to be a nervous time for Canadians who made a contrarian bet that the rally in Japanese stocks in 2012 would continue this year.

The Bank of Japan announced it would switch to an open-ended commitment to buying assets next year as it doubled its inflation target to 2 per cent. But many analysts said the moves didn't go far enough, as the bank didn't set a time-frame to achieve the inflation target and the size of its asset purchases were not increased for this year.

The yen was up about 0.5 per cent this morning to 88.31 per U.S. dollar, moving in the opposite direction of what would help the country's export sector.

The disappointment in Japan also spilled over to other major stock markets in Asia overnight, although losses were much more subdued. European stocks are mixed to slightly higher today.

Here's a look at some of the stocks moving on news this morning:

Google shares are up nearly 6 per cent after reporting adjusted earnings of $10.65 a share, beating forecasts for $10.47. Revenues also beat the Street consensus.

IBM shares are up 6 per cent after it reported a 10 per cent boost in fourth quarter income to $5.39 a share, beating forecasts. It also beat revenue forecasts.

McDonald's posted earnings of $1.38 a share, beating estimates by 5 cents. Revenue of $6.95-billion beat estimates of $6.89-billion. But its rate of growth didn't thrill investors; shares are down 0.4 per cent.

Rare earth producer Molycorp Inc. expects significantly lower-than-estimated revenue and cash flow for the first half of 2013 and said it might have a cash shortfall of about $250-million for the year. Fourth-quarter revenue and cash flow were also significantly less than expected. Shares are down nearly 8 per cent.

Motorola Solutions Inc. reported adjusted earnings of $1.10 a share, beating expectations for $1.02. Shares are down 2.3 per cent.

Coach Inc shares are down 15 per cent after the retailer posted disappointing same-store sales for the holidays.

Diversified U.S. manufacturer United Technologies Corp. reported a 26 per cent decline in profit, with per-share profit from continuing operations coming in at $1.04, down from $1.42 a year earlier. Shares are up 0.5 per cent.

Cree Inc. shares are up nearly 20 per cent after the LED lighting technology company gave a better-than-expected quarterly report and guidance.

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