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IBM plunges, drags down market

A trader on the floor of the New York Stock Exchange.
Getty Images
A trader on the floor of the New York Stock Exchange.

Shares of IBM fell more than 5 percent Tuesday, taking the major U.S. stock indexes off their session highs.

The Dow component reported better-than-expected quarterly results Monday, but that didn't stop investors from selling the stock.

"Although IBM delivered rare revenue upside, the reporting of new business segments adds another dimension of challenges for the market in analyzing IBM while mixing in a tax benefit with a one-time charge offset obfuscates IBM's performance," Brian White, an analyst at Drexel Hamilton, said in a note Tuesday.

Adam Sarhan, CEO of Sarhan Capital, told CNBC there is an underlying dichotomy between the sectors, insofar as how they've reacted to earnings. He noted that while earnings among financial stocks fell, the sector reacted positively. Most of the big financial U.S. firm posted quarterly results last week.

Meanwhile, "tech stocks have not reacted well [to earnings]," Sarhan said. IBM and Netflix both posted better-than-expected quarterly results, but the sector traded lower Tuesday and is down 0.3 percent this week.

Intel and Yahoo are both scheduled to report quarterly results Tuesday after the bell, with Microsoft and Alphabet due to report Thursday.