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Stocks lower on weak corporate earnings

NEW YORK — The stock market fell in early trading Thursday, dragged down by disappointing earnings from IBM and other major U.S. companies.

The weak corporate results were more than enough to offset the positive news that Congress raised the nation’s borrowing limit late Wednesday to temporarily avert the United States from defaulting on its debt.

The Dow Jones industrial average was down 96 points, or 0.6 percent, to 15,278 in the first half-hour of trading.

IBM was the biggest decliner on the Dow, falling $11.30, or 6.1 percent, to $175.30. The technology giant said Wednesday that its third-quarter net income rose 6 percent, but revenue fell and missed Wall Street’s forecast by more than $1 billion.

Goldman Sachs also weighed down the index. The investment bank’s revenue fell sharply as trading in bonds and other securities slowed. Goldman was down $4.07, or 3 percent, $158.10.

Other major stock indexes fell far less than the Dow. The Standard & Poor’s 500 index lost three points, or 0.2 percent, to 1,718 and the Nasdaq composite lost 10 points, or 0.3 percent, to 3,829.

Now that there was no longer an immediate fear that the United States could default on its debt and the government was reopening, Wall Street was surveying the damage.

Market analysts expect 16-day partial shutdown of the government caused billions of dollars of damage to the U.S. economy through furloughed government employees, delayed government contracts, and declines in tourism at national parks. Analysts at Wells Fargo said the shutdown likely cut 0.5 percentage points off of U.S. economic growth.

Investors are still concerned that the two parties won’t be able to reach a longer-term budget agreement. The deal approved late Wednesday only permits the Treasury Department to borrow through Feb. 7 and fund government through Jan. 15.

“The agreement represents another temporary fix that pushes fiscal uncertainty into the early months of next year,” Wells Fargo analysts said.

Despite Thursday’s modest declines and medium-term worries about the damage the debt ceiling and government shutdown did to the economy, there were signs that normalcy was returning to financial markets.

Stresses in the bond market were easing. The one-month Treasury bill was back to trading at a yield of 0.01 percent, about where it was a month ago, and down sharply from 0.35 percent on Tuesday.

Usually a staid, conservative security, the one-month T-bill was subjected to a wave of mass selling at the beginning of the month. Investors feared the T-bill would be the first piece of government debt to be affected by a U.S. default if the debt ceiling were breached and the federal government could no longer pay its obligations.

The yield on the more closely-watched 10-year Treasury note fell to 2.62 percent from 2.67 percent Wednesday.