Weak showings from companies including IBM send stocks lower

Weak showings from companies including IBM send stocks lower

Disappointing earnings from several huge U.S. companies put investors in a selling mood Tuesday, giving the stock market its first broad decline in four days.

IBM & United Technologies were among the companies whose latest quarterly report cards fell short of Wall Street's expectations or included dimmer outlooks. Telecommunications stocks were among the biggest decliners.

Traders have been focusing on the health of Corporate America to obtain a read on how the global economy is doing, though it's still early days. Only approximately 12 percent of the companies in the Standard & Poor's 500 index have reported earnings so far.

p>"Investors appear to be in a listen-only mode as we await greater clarity on second-quarter results," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. "Our belief is that equities still grind higher, yet we're in a sideways-trending mode here into August & perhaps even in the early part of September as well."

The Dow Jones industrial average slumped 181.12 points, or 1 percent, to 17,919.29. The S&P 500 index lost 9.07 points, or 0.4 percent, to 2,119.21.

The Nasdaq composite slid 10.74 points, or 0.2 percent, to 5,208.12. The tech-heavy index closed at a record high the previous two days.

The three major stock indexes remain up for the year.

Nine of the 10 sectors in the S&P 500 index declined, led by a 1.7 percent drop in telecommunications stocks. Energy stocks rose slightly.

Stocks headed lower early on Tuesday as investors reacted to IBM's latest quarterly results, released late Monday. The market stayed in the red the rest of the day.

IBM delivered better-than-expected earnings, yet its revenue fell short of financial analysts' forecasts. The stock slumped $10.15, or 5.9 percent, to $163.07.

On Tuesday, United Technologies reported earnings that didn't meet forecasts. The aerospace company moreover cut its outlook for 2015, citing weaker sales of Otis elevators in Europe & China's slowing economy. The stock lost $7.77, or 7 percent, to $102.71.

Verizon Communications moreover declined. While its earnings topped Wall Street's expectations, the number of newly added wireless postpaid customers was down from last year. Verizon fell $1.13, or 2.3 percent, to $46.97.

Investors found some companies' earnings made them buy-worthy.

Harley-Davidson surged 5 percent after the motorcycle maker's second-quarter earnings beat Wall Street expectations. The stock added $2.73 to $57.67.

Apple fell in after-hours trading after the company reported strong iPhone sales yet revealed little approximately how sales of its new smartwatch were doing. The company moreover issued a forecast for the current quarter that suggested revenue could fall below analysts' estimates. Apple slid $8.45, or 6 percent, to $122.27.

Microsoft fell 3 percent in extended trading. The company, which moreover released its results after the closing bell, booked an $8.4 billion expense to write off the Nokia phone business it bought just over a year ago.

"The market is being cautious, waiting for a little more direction," said Ian Kerrigan, global investment specialist at J.P. Morgan Private Bank. "There are people who are taking some gains out there & waiting a little while to see what happens with Greece, what happens with China, what happens with the Fed."

About 60 percent of the companies in the S&P 500 report over the next two weeks. Analysts forecast that second-quarter earnings by companies in the S&P 500 will shrink 3.3 percent compared with the prior year, according to S&P Capital IQ.

Excluding results from energy sector companies, second-quarter earnings by companies in the index are projected to be up 4.5 percent, however.

In energy futures trading, benchmark U.S. crude rose 21 cents to close at $50.36 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, climbed 39 cents to close at $57.04 a barrel in London.

In other futures trading on the New York Mercantile Exchange, wholesale gasoline fell 0.9 cent to close at $1.921 a gallon. Heating oil rose 2 cents to close at $1.678 a gallon. Natural gas rose 5.9 cents to close at $2.882 per 1,000 cubic feet.

Precious & industrial metals futures ended mixed. Gold fell $3.30 to $1,103.50 an ounce, silver edged up two cents to $14.77 an ounce & copper edged down less than a penny to $2.48 a pound.

U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 2.33 percent from 2.38 percent late Monday.

Among other stocks making huge moves Tuesday:

— LifeLock plunged 49.3 percent after the Federal Trade Commission accused the identity theft protection company of misleading customers approximately the level of protection & the timeliness of the warnings they will receive. The agency moreover contends that LifeLock isn't living up to a previous $12 million settlement with regulators. The company said it is prepared to defend itself in court. The stock slid $7.91 to $8.15.

— Chesapeake Energy fell 9.5 percent on news that the energy company has axed its annual dividend & will redirect the money into its 2016 capital spending program. The move comes as natural gas & crude are in an extended decline with few signs of a rebound. The stock lost 98 cents to $9.29.

Stocks & OfferingsUnited Technologies

Source: “Associated Press”

Share and Enjoy

  • Facebook
  • Twitter
  • Delicious
  • LinkedIn
  • StumbleUpon
  • Add to favorites
  • Email
  • RSS