Market Wrap: Stocks Fall for 3rd Day as Earnings Disappoint

Volatile Day Of Trading Leaves Dow Closing 180 Points Down
Spencer Platt/Getty Images
By Caroline Valetkevitch

NEW YORK - U.S. stocks fell for the third straight day Thursday after disappointing corporate results and forecasts added to concerns about the U.S. profit outlook.

The Dow Jones industrial average fell back into the red for the year, with 3M, American Express and Caterpillar contributing the most to the average's fall.

The Dow Jones transportation average was off 2.1 percent, with only one of its 20 components ending in the black. Union Pacific (UNP), down 5.7 percent at $92.12 after posting a lower quarterly profit, led the decline in transportation shares and was among the S&P 500's biggest drags.

%VIRTUAL-pullquote-The initial take on big earnings reports has been lukewarm at best.%"The initial take on big earnings reports has been lukewarm at best," said Bruce Zaro, chief technical strategist at Bolton Global Asset Management in Boston.

"The strong dollar certainly has been mentioned a lot, and I think there are still questions about demand in the economy and what would translate into revenue growth for most reporting companies."

Caterpillar (CAT) shares fell 3.6 percent to $76.88 and touched a four-year low. The world's largest construction and mining equipment maker reported sales declines in key markets in a sluggish global economy.

American Express (AXP) was down 2.5 percent at $77.01 after its revenue missed expectations, while diversified manufacturer 3M (MMM) was down 3.8 percent at $149.50 after cutting its full-year forecast.

The Dow Jones industrial average fell 119.09 points, or 0.7 percent, to 17,731.95 (^DJI), the Standard & Poor's 500 index (^GSPC) lost 12 points, or 0.6 percent, to 2,102.15 and the Nasdaq composite (^IXIC) dropped 25.36 points, or 0.5 percent, to 5,146.41.

After the bell, however, Nasdaq 100 e-mini futures turned positive following results from Amazon, whose shares jumped 15 percent in extended trading.

During the regular session, all of the 10 major S&P 500 sectors were lower with the utilities index leading the decline with a 1.5 percent fall along with the materials index, also down 1.5 percent.

Dow Chemical's (DOW) 5.2 percent drop to $47.45 weighed the most on the sector. Dow Chemical warned of soft demand in China after posting stronger-than-expected results.

Mixed Earnings Picture

Second-quarter S&P 500 earnings have been mixed, with 75 percent of companies so far beating analyst expectations and just 52 percent surpassing revenue expectations, according to Thomson Reuters (TRI) data.

The S&P 500 is currently trading at 16.9 times forward 12 months earnings, above the 10-year median of 14.7 times, according to StarMine data.

Qualcomm (QCOM) fell 3.8 percent to $61.78, a day after the chipmaker said it may break itself up as it delivered its third profit warning this year.

On the plus side, SanDisk (SNDK) jumped 17.6 percent to $63.70, a day after the data storage products maker reported a quarterly profit double what analysts had expected.

NYSE decliners outnumbered advancers 2,099 to 965, for a 2.18-to-1 ratio; on the Nasdaq, 1,908 issues fell and 869 advanced for a 2.20-to-1 ratio favoring decliners.

The S&P 500 posted 31 new 52-week highs and 40 new lows; the Nasdaq composite recorded 103 new highs and 143 new lows.

What to watch Friday:
  • The Commerce Department releases new home sales for June at 10 a.m. Eastern time.
Earnings Season
These selected companies are scheduled to release quarterly financial results:
  • American Airlines Group (AAL)
  • DTE Energy (DTE)
  • Johnson Controls (JCI)
  • Moody's (MCO)
  • State Street Corp. (STT)
  • V.F. Corp. (VFC)
  • Ventas (VTR)
  • Vodafone Group (VOD)
  • Xerox (XRX)
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