NEW YORK (REUTERS) - The S&P 500 and Nasdaq declined on Friday as results from Intel and General Electric (GE) were the latest to dampen the view on fourth-quarter earnings.
Volatility picked up late in the session, thanks in part to selling related to options expiration, analysts said.
Earnings season is still in the early phase, but S&P 500 companies so far are beating analysts' expectations at a rate that's below what's typical, according to Thomson Reuters data.
Bucking the trend, the Dow ended higher - helped by a rally in American Express Co and Visa. AmEx jumped 3.6 per cent to US$90.97 a day after reporting quarterly results.
Intel's stock slid 2.6 per cent to US$25.85 and was among the top weights on each of the three major United States (US) stock indexes, a day after the chipmaker gave a lukewarm forecast for first-quarter revenue and posted fourth-quarter earnings that missed expectations by a penny.
GE shares dropped 2.3 per cent to US$26.58 after the conglomerate reported disappointing 2013 profit margins.
But at least some of the day's move could have been options related.
"January options expiration tends to be among the most volatile, and today's an example of that," said Mr Bruce Zaro, chief technical strategist of Delta Global Asset Management in Boston. "Money managers typically take their most aggressive picks during the first part of the year, and a lot of options strategies are involved in those picks."
The Dow Jones industrial average rose 41.55 points or 0.25 per cent, to end at 16,458.56. The S&P 500 fell 7.19 points or 0.39 per cent, to finish at 1,838.70. The Nasdaq Composite dropped 21.107 points or 0.50 per cent, to 4,197.582.
For the week, the Dow rose 0.13 per cent, the S&P 500 slipped 0.20 per cent and the Nasdaq gained 0.55 per cent.
With earnings from 10 per cent of the S&P 500 companies so far, 50 per cent have exceeded expectations, below the historical average of 63 per cent for a full season, Thomson Reuters data showed.
"The market was teased in a good way by some of the first earnings, tempered later with disappointing numbers, and it's trying to make a sense of what the quarter is going to be," said Mr John Manley, chief equity strategist at Wells Fargo Funds Management in New York.
Visa shares jumped 4.7 per cent to close at US$232.18. A US appeals judge appeared to side with the Federal Reserve over a group of retailers in a dispute over the level of fees set by the Fed on the use of debit cards.
Among other gainers, Morgan Stanley rose 4.4 per cent to US$33.40 after previously hitting US$33.52, its highest since November 2009. The bank reported a sharp drop in quarterly profit as it was hit by legal bills, but adjusted earnings beat estimates.
US-listed shares of Deutsche Bank fell 3 per cent to US$52.27 after a Wall Street Journal report that the largest German bank is considering a profit warning as executives believe its upcoming quarterly results will be below investors' expectations.
The Dow Jones Transportation Average slipped 0.4 per cent. Shares of United Parcel Service Inc fell 0.6 per cent to US$99.91 and the stock of Con-Way dropped 2 per cent to US$40.59 after fourth-quarter outlooks.
After the S&P 500's 30 percent surge in 2013, largely due to stimulus from the Federal Reserve, the benchmark index started the year on a weak note. But the S&P 500 recovered recently to set a record closing high on Wednesday.
The economy, expected to show further signs of recovery as the Fed slowly withdraws its stimulus, gave reassuring signs.
Data showed US industrial output rose at its fastest clip in 3-1/2 years in the fourth quarter as factory activity closed out the year on a strong note.
Volume was above the average for the month. About 6.8 billion shares changed hands on US exchanges, compared with the average of 6.6 billion so far this month, according to data from BATS Global Markets.
Decliners outnumbered advancers on the New York Stock Exchange by a ratio of about 3 to 2. On the Nasdaq, about 15 stocks fell for every 11 that rose.