Stocks edge lower on mixed signals on the economy
NEW YORK — Mixed reports on the economy and earnings Monday sent the stock market drifting lower and easing off a two-week rally that lifted major indexes 11 percent.
A government report said sales of new homes in the U.S. rose by the largest amount in nearly nine years last month, but it also contained troubling news that home prices fell sharply from a year earlier. Stocks got an early lift from the report but quickly gave up the gains.
The latest batch of corporate earnings offered a mix of news.
RadioShack Corp. reported higher second-quarter earnings that beat forecasts, but mainly from cost-cutting — a theme that has become familiar this earnings season. Health insurer Aetna Inc. and manufacturer Honeywell International Inc. posted gloomier results.
Analysts said the market was due for a pause. Brian F. Reynolds, chief market strategist at WJB Capital Group, said investors were surprised by the strength of corporate earnings reports in the past two weeks.
“After a run of any direction stocks take a little break and people kind of catch their breath,” Reynolds said. “I think that’s especially true now because people were caught off guard. I think so many people were so bearish.”
In early afternoon trading, the Dow Jones industrial average fell 16.17, or 0.2 percent, to 9,077.07. The broader Standard & Poor’s 500 index fell 1.62, or 0.2 percent, to 977.64, while the Nasdaq composite index fell 8.43, or 0.4 percent, to 1,957.53.
Advancing stocks narrowly outnumbered those that fell on the New York Stock Exchange, where volume came to 587.7 million shares compared with 603 million traded at the same point Friday.
Bond prices fell, pushing yields higher. Prices showed little change after decent demand at a government bond auction. The yield on the benchmark 10-year Treasury note rose to 3.72 percent from 3.66 percent late Friday.
In economic news, the Commerce Department said new home sales rose 11 percent in June to 384,000, more than expected and the strongest pace since November 2008. Last week stocks got a lift from a separate report a better than expected sales of existing homes.
Among companies posting results, Aetna’s profit skidded 28 percent on higher medical expenses in its commercial business, and the health insurer cut its profit forecast for the second time in two months. The stock fell $1.24, or 4.7 percent, to $25.20.
Manufacturer Honeywell fell 1 cent to $33.98 as its earnings dropped 38 percent on trouble in automobiles and construction. Honeywell said it doesn’t expect to see a recovery this year.
Verizon, the nation’s largest wireless carrier, said profit fell 21 percent as cost-cutting in its wireline business failed to keep pace with falling revenues, but its adjusted earnings narrowly beat expectations. Verizon fell 63 cents, or 2 percent, to $30.87.
Investors have been buying stocks as companies from AT&T Inc. to chip maker Intel Corp. post earnings that are far stronger than analysts had predicted. Others, like heavy equipment maker Caterpillar Inc., have raised expectations for later in the year.
The reports have given investors the confidence to restart a rally that began in March, sending the S&P 500 rocketing 40 percent off a 12-year low before stalling in mid-June. The past two weeks have erased the monthlong slide and given new strength to the rally.
But some analysts remain cautious because expectations were low going into the weeks in which companies report results from the April-June quarter.
“Last week was dubbed as a good earnings week, but good compared to what?” asked David Hefty, CEO of Cornerstone Wealth Management in Auburn, Ind. “It doesn’t take a lot to get the market excited these days.”
The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude rose 16 cents to $68.21 a barrel on the New York Mercantile Exchange.
The Russell 2000 index of smaller companies fell 0.51, or 0.1 percent, to 547.95.
Overseas, Japan’s Nikkei stock average rose 1.5 percent. Britain’s FTSE 100 rose 0.2 percent, Germany’s DAX index rose 0.4 percent, and France’s CAC-40 rose 0.2 percent.
Related News
Market rally loses steam, stocks finish mostly lower even after Intel raises sales forecastAugust 28th, 2009 Stocks mostly lower; Nasdaq buoyed by Intel newsNEW YORK — Stocks mostly fell Friday as investors balked at extending the market's recent rally despite an improved outlook from Intel Corp. Trading was quiet, as it has been all week, as summer vacations kept many traders out of the market.
Stocks drift lower after GDP, weekly unemployment reports do little to spur buyingAugust 27th, 2009 Stocks drift lower after GDP, jobs dataNEW YORK — Stocks are having trouble holding on to recent gains, despite more signs that the economy might be stabilizing. Major stock indicators were slightly lower in early trading Thursday after the Labor Department said first-time unemployment claims fell 10,000 last week to 570,000, just shy of economists' expectations for 565,000.
Stocks narrowly mixed as worries about rising job losses keep market's recent gains in checkAugust 5th, 2009 Worries over weak job market pressure stocksNEW YORK — More reminders of a weak job market are chilling the stock market's rally. Stocks are narrowly mixed in early trading Wednesday after a private-sector report on unemployment offered little encouragement ahead of Friday's crucial jobs data from the Labor Department.
Stocks lower as investors pause from recent runup, little moved by rise in consumer spendingAugust 4th, 2009 Market pauses from recent runup, stocks open lowerNEW YORK — Investors are pausing after the market's huge rally, pushing stocks slightly lower as they wait for more confirmation that the economic recovery is under way. The early slide in stocks on Tuesday follows mostly lower trading on overseas markets and comes after a three-week-long rally that catapulted the benchmark Standard & Poor's 500 index past the 1,000 mark on Monday for the first time since November.
Stocks slide despite reports showing uptick in consumer spending, more healing in housingAugust 4th, 2009 Stocks drift lower, investors pause from rallyNEW YORK — Stocks drifted lower Tuesday, taking a break from a huge rally, as more signs of healing in the housing market and an uptick in consumer spending failed to spur buying. The dip comes after a three-week-long surge that catapulted the Standard & Poor's 500 index past the 1,000 mark on Monday for the first time since November.
Stocks fall as July consumer confidence falls; investors remain cautious about mixed earningsJuly 28th, 2009 Stocks slide as July consumer confidence fallsNEW YORK — Jitters about the economy are putting the stock market rally on hold again. Stocks fell moderately Tuesday after a private research group said consumer confidence fell more than expected in July.
Stocks zigzag as home sales jump; Uneven earnings reports weigh on market after two-week rallyJuly 27th, 2009 Stocks waver amid mixed signals on the economyNEW YORK — Mixed reports on the economy and earnings left the stock market drifting early Monday, easing off of a two-week rally that lifted major indexes 11 percent. A government report showing sales of new homes in the U.S.
Uneven earnings and economic news weigh on stocks, putting a 2-week rally on holdJuly 27th, 2009 Stocks zigzag amid mixed signals on the economyNEW YORK — Mixed reports on the economy and earnings sent the stock market drifting on Monday, easing off a two-week rally that lifted major indexes 11 percent. A government report said sales of new homes in the U.S.
Stocks fluctuate as home sales jump; mixed earnings weigh on market after two-week rallyJuly 27th, 2009 Stocks fluctuate as home sales jump 11 percentNEW YORK — Stocks are fluctuating after the government's report that new home sales rose last month by the largest amount in nearly nine months. The Commerce Department says sales rose 11 percent in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000.
Stocks retreat slightly in early trading following big jump a day earlierJuly 24th, 2009 Stocks pull back a bit after prior day's big jumpNEW YORK — Investors are taking a breather after a surge in stocks that sent the Dow Jones industrials above the 9,000 mark for the first time since January. Stocks are slightly lower in early trading Friday, as disappointing earnings news from companies like Microsoft Corp.
Stocks end mixed after weeklong rally; Apple jumps but Advanced Micro, Wells Fargo disappointJuly 22nd, 2009 Mixed earnings put brakes on stock market rallyNEW YORK — Investors aren't giving up on the stock market's rally, but they're not making big bets either. Stocks ended a quiet day mixed Wednesday as traders remained hesitant to push further into the market following a weeklong surge on strong earnings reports.
US stocks surge before wave of company earningsJuly 14th, 2009 NEW YORK - US stocks rose sharply Monday ahead of a series of quarterly earnings reports from major financial and company earnings. Financial shares drove the rally, led by Goldman Sachs after a prominent Wall Street analyst gave the bank's stock a "buy" rating.
Stocks futures point to lower opening as investors prepare for crush of earningsJuly 13th, 2009 Stocks futures lower ahead of busy earnings weekNEW YORK — Stock futures are lower as investors brace for a crush of earnings reports this week, including key readings from the banking sector. Overseas, Asian markets tumbled Monfay, but European stocks have posted only modest losses.
Stocks dip as investors seek more info on economy, earningsJuly 10th, 2009 Stocks fall as earnings jitters increase
NEW YORK — Falling oil prices and unease over corporate earnings put pressure on stocks Friday. Stocks are mostly lower in early trading, as investors shed positions in energy, utilities and bank shares.
Financial stocks up in mixed day on Wall StreetApril 14th, 2009 NEW YORK - A banking rally has helped US stocks make limited gains after mixed trading which began with poor earnings forecasts from planemaker Boeing Co and energy giant Chevron Corp. Financial stocks climbed 4.8 percent Monday, led by Citigroup Inc and Bank of America Corp as many in the sector prepared to release quarterly earnings this week.
Loading ...