Member access

4-Traders Homepage  >  News

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

Latest news
Date Title
1m ago YUNBO DIGITAL SYNERGY : TASC's New Suites Offer Tax Savings and Protection
4m ago GOOGLE 'C' : executive sets skydiving record
7m ago KADER : Holders are KO'd
16m ago BUSINESS MACHINES : Student Teams Prepare Initial Business Ideas for CUNY-IBM Watson Case Competition
21m ago India's finance minister favors interest rate cut
27m ago ASTRA TBK PT : virging on awful ; celtic v kilmarnock SCOTS PREM, CELTIC PARK KICK-OFF: TOMORROW, 1.00PMDutch defender scathing on woeful Astra display
27m ago AIRBUS : Hughes is refusing to press the panic button
27m ago Costa could play against Red Devils after night in hospital ; Chelsea hope striker has recovered from illness
28m ago SAVILLS : Views to die for ; From Gower to the Great Orme these are the homes in Wales with views to match their price tags. Dramatic coastal seascapes and...
30m ago FYFFES : Bananas split ; companies today
Latest news
Advertisement
Hot News 
DIGITAL RIVER : Announces Agreement to be Acquired by Investor Group Led by Siris Capital Group for $26.00 per Share in Cash
EDREAMS ODIGEO : Statement responding to BA and Iberia statement
4IMPRINT : Full Year Expectations Underpinned By Strong Third Quarter
ATLANTIS RESOURCES : Raises GBP5.0 Million In Discounted Placing (ALLISS)
MERIT MEDICAL SYSTEMS : posts 3Q profit
Most Read News
1d ago MATSON : Shipping company pleads guilty in molasses spill
1d ago HEARTLAND EXPRESS : 2014 Q3 Earnings Release
1d ago Fannie Mae settles shareholder lawsuit for $170 million
1d ago APPLE : Time for all Apple products to enter China
1d ago Google's Pichai to oversee major products and services
Most recommended articles
21m ago India's finance minister favors interest rate cut
33m ago CHINA'S AUTO MARKET GROWTH MAY HALVE TO 7 PERCENT THIS YEAR : industry body head
1h ago South Korea fund to abstain from Samsung merger vote, wants share buybacks
1d agoDJOregon Initiative Seeks Lower Pot Taxes Than Cities Want
1d ago WEEKLY TRADING FORECAST : FX Traders Prepare for Heavy Volatility on FOMC, GDP and ECB Stimulus
Dynamic quotes  
ON
| OFF