Log in
Lost password
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  News


Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

U.S. Stocks Drop with Disappointing Earnings

10/17/2013 | 10:10am US/Eastern

By Kaitlyn Kiernan and Tomi Kilgore

As the government reopened after a 16-day shutdown, U.S. stocks dropped Thursday as investors turned their attention toward lackluster economic reports and earnings results from blue-chip companies.

The Dow Jones Industrial Average futures dropped 99 points, or 0.6%, to 15275. On Wednesday, the Dow rallied 206 points, or 1.4%, after Senate leaders reached an agreement to raise the debt ceiling and reopen the government. The House voted Thursday evening to pass the deal, which will reopen the government through Jan. 15 and extend the debt ceiling through Feb. 7. President Barack Obama signed the bill after midnight.

The S&P 500 index lost four points, or 0.2%, to 1718, with tech shares leading declines by seven of 10 industry sectors. The Nasdaq Composite Index shed seven points, or 0.2%, to 3832.

Growing expectations the turmoil in Washington would keep the Federal Reserve from paring back its bond purchases drove down the dollar and pushed up Treasury prices. European stocks eased.

"Generally speaking, we're going to get back to stock picking," said Dan McMahon, director of equity trading at Raymond James. "Now, it's all about earnings. We've got to get back to work."

Blue-chip International Business Machines slumped 7.5% after reporting third-quarter revenue that fell short of analyst expectations amid a sharp decline in hardware sales. Net profit, however, topped estimates.

Fellow Dow components Goldman Sachs Group and UnitedHealth Group also fell after reporting quarterly results. Goldman Sachs dropped after missing on revenue but topping earnings expectations, citing a period of slow client activity. UnitedHealth dropped after matching forecasts on earnings and falling shy on revenue.

Verizon Communications gained after beating on earnings on strong wireless subscriber growth. Shares of eBay fell after third-quarter revenue missed estimates and the online auctioneer provided a disappointing earnings outlook for the current quarter.

Despite Thursday's weakness, Mr. McMahon said it was difficult not to be optimistic, with the market trading close to all-time highs. "Any selloff will be somewhat muted," he said. "We'll likely continue to bump along, and trend higher" through year end.

Initial claims for jobless benefits in the latest week fell to 358,000 from the previous week's revised 373,000, compared with expectations of a drop to 330,000. The elevated level of claims continue to reflect processing delays in California.

Still on tap, the Philadelphia Federal Reserve's October index of manufacturing activity is seen slipping to 15 from September's 22.3. Data on housing starts, building permits and industrial production have been postponed until further notice due to the government shutdown.

The yield on the 10-year Treasury note fell to 2.624% from 2.669% late Wednesday. Yields move inversely to prices. The dollar fell below 98 yen, while the euro pushed above $1.37 to approach an eight-month high.

October gold futures rose 2.6% to $1,315. "The market was waiting for a selloff post the U.S. Congress deal which didn't happen, so some people are throwing in the towel on the short gold trade," traders on Citigroup's bullion desk said.

November crude-oil futures lost 1.2% to $101.11 a barrel.

"Economic data has been delayed, distorted and depressed by the shutdown and it will not be until early next year that we can get a clear picture of the fourth quarter," said Keith Wade, chief economist at Schroders, which has $388 billion in assets under management. "The risk of another political standoff will also weigh on Fed deliberations. As a result we would not expect tapering to begin until March next year, with the possibility it will be delayed until June."

European stock markets edged lower, failing to build on gains forged earlier this week. A lowered growth outlook by Germany's leading economic think tanks helped offset better-than-expected retail sales data out of the U.K.

The Stoxx Europe 600 eased 0.2%, Germany's DAX 30 index lost 0.7%, but in London, the FTSE 100 index added 0.3%.

Asian markets were mixed to mostly higher in the wake of the U.S.'s budget deal. Japan's Nikkei Stock Average rose 0.8% and Australia's S&P/ASX 200 gained 0.4%, while China's Shanghai Composite slipped 0.2%.

Write to Tomi Kilgore at tomi.kilgore@dowjones.com and to Kaitlyn Kiernan at kaitlyn.kiernan@wsj.com

React to this article
Latest news
Date Title
11:10p MEDTRONIC : Star Tribune (Minneapolis) Jon Tevlin column
11:09p EU's Schulz says Volkswagen scandal a 'heavy blow' for German economy
11:08p ARCTIC CAT : Former Black and Decker exec Chris Metz throws Arctic Cat turnaround plan into high gear
11:06p HOUR GLASS : 2 killed, 1 wounded in shooting outside NE Portland bar
10:37p NINTENDO : How parents can keep their little gamers safe
10:33p DOMINION RESOURCES : BRIEF: 10 p.m.Nearly 3,000 still without power in Williamsburg/James City area
10:09p AMGEN : With lease up, J.D. Power readies for Westlake Village relocation
10:06p AMERIS BANCORP : JACKSONVILLE BANCORP INVESTOR ALERT BY THE FORMER ATTORNEY GENERAL OF LOUISIANA: Kahn Swick & Foti, LLC Investigates Adequacy of Price and Process in Proposed Sale of Jacksonville Bancorp, Inc.
10:06p PARK STERLING : FIRST CAPITAL BANCORP INVESTOR ALERT BY THE FORMER ATTORNEY GENERAL OF LOUISIANA: Kahn Swick & Foti, LLC Investigates Adequacy of Price and Process in Proposed Sale of First Capital Bancorp, Inc.
10:05p MANCHESTER UNITED : The Miami Herald Michelle Kaufman column
Latest news
Hot News 
UBS : Wealth Management Americas Introduces Enhanced Forecasting Capabilities for Equity Plan Clients
URALS ENERGY PCL : Update on Petraco Loan and Petrosakh Well 54
PERFORMANCE FOOD : to Ring New York Stock Exchange Opening Bell
SDL : Founder And CEO To Leave, Chairman To Step In On Interim Basis
Most Read News
09:56p WORLD DAIRY EXPO : Top Dollar Brought at the World Dairy Expo Breed Sales
09:56p WORLD DAIRY EXPO : New York's Dueppengiesser Wins 2015 Merle Howard Award
09:56p WORLD DAIRY EXPO : Katrysha Earns High Honors at the 2015 International Holstein Show
09:56p WORLD DAIRY EXPO : River Valley Farm Takes Home Overall Herdsmanship Award
08:47p Insight - After VW, Germany needs EU friends to join its party
Most recommended articles
11:09p EU's Schulz says Volkswagen scandal a 'heavy blow' for German economy
03:18p Chinese firms eyeing 30 percent or less in Hinkley Point - report
02:04p FORD MOTOR : U.S. auto union, Ford avert strike at pickup factory
01:48pDJBrazil's Central Bank Chief Alexandre Tombini Spared in Cabinet Reshuffle
12:35p Italy to test 80 diesel models of main carmakers