The US markets don’t seem destined to continue their rally today, after the Standard & Poor’s 500 Index completed its longest winning streak since September yesterday, and as investors weighed earnings from AT&T and Boeing Co. and a leading home-sales gauge unexpectedly fell.
By Paolo Palazzi-Xirinachs
Wednesday, April 23, 2014
The S&P 500 fell 0.1% to 1,877.12 at 12:30 p.m. EDT in New York. The Dow had slipped 17.37 points to 16,497. In earnings news today, AT&T dropped 3% as more customers opted to pay full price for smartphones in exchange for lower bill in the future. Amgen Inc. plunged 5.2% after sales for its best-selling arthritis drug missed analysts’ estimates. Netflix Inc. lost 5.3% after Amazon.com Inc. reached a deal to stream old episodes of HBO series. Boeing added 1.9% after a boost in jetliner deliveries helped profit top forecasts. The mix of news may have inspired investors to take profits following six straight days of gains.
Better-than-expected corporate earnings have boosted Wall Street lately, though companies have largely been beating reduced forecasts. According to Thomson Reuters data, profits are seen rising 1.6% this quarter, down from the 6.5% growth rate estimated at the start of the year. With 28% of the S&P 500 having reported results, 65.2% have topped expectations, according to Thomson Reuters data, above the long-term average of 63%.
Commerce Department data showed that sales of new homes unexpectedly plunged in March to the lowest level in eight months, reflecting a broad-based retreat that signals the industry is facing bigger challenges than just bad weather. Sales dropped 14.5% to a 384K annualized pace. Economists predicted a 450K annualized pace. A report from Markit Economics showed a preliminary US manufacturing index decreased to 55.4 in April from a final reading of 55.5 a month earlier. The median forecast in a Bloomberg survey of economists was 56. Readings greater than 50 signal expansion. Emerging-market equities dropped and European shares snapped the biggest three-day rally since June after the Markit gauge for China signaled continuing weakness in the world’s second-largest economy.
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