* Intel falls after results, outlook
* American Express and Visa lead the Dow's gainers
* Morgan Stanley stock hits highest since 2009 after results
* Dow up 0.3 pct, S&P 500 off 0.4 pct, Nasdaq down 0.5 pct
By Caroline Valetkevitch
NEW YORK, Jan 17 (Reuters) - The S&P 500 and Nasdaq declined
on Friday as results from Intel and General Electric
were the latest to dampen the view on fourth-quarter
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
percent to $90.97 a day after reporting quarterly results.
Intel's stock slid 2.6 percent to $25.85 and was among the
top weights on each of the three major U.S. 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.
General Electric shares dropped 2.3 percent to $26.58 after
the conglomerate reported disappointing 2013 profit
But at least some of the day's move could have been options
"January options expiration tends to be among the most
volatile, and today's an example of that," said 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 percent, to end at 16,458.56. The S&P 500 fell 7.19
points or 0.39 percent, to finish at 1,838.70. The Nasdaq
Composite dropped 21.107 points or 0.50 percent, to
For the week, the Dow rose 0.13 percent, the S&P 500 slipped
0.20 percent and the Nasdaq gained 0.55 percent.
With earnings from 10 percent of the S&P 500 companies so
far, 50 percent have exceeded expectations, below the historical
average of 63 percent for a full season, Thomson Reuters data
"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
John Manley, chief equity strategist at Wells Fargo Funds
Management in New York.
Visa shares jumped 4.7 percent to close at $232.18. A U.S.
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 percent
to $33.40 after previously hitting $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
U.S.-listed shares of Deutsche Bank fell 3 percent to
$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
The Dow Jones Transportation Average slipped 0.4
percent. Shares of United Parcel Service Inc fell 0.6
percent to $99.91 and the stock of Con-Way dropped 2
percent to $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 U.S. 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 U.S. 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.