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 | 11:10am 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
9m ago CHINA VANGUARD : Notice of Board Meeting
15m ago ORBITAL SCIENCES : Virgin Galactic spaceship ends in fatal crash in California
18m ago JOHNSON & JOHNSON : CEO to Future Leaders: Learn to Communicate
18m ago DANONE : announces baby-food step in China
19m ago LINAMAR : Expanding its Buncombe County Facility
19m ago PRAXAIR : Building New World Headquarters in Danbury (Gov Malloy)
19m ago MOSAIC : Mining Impacts on Florida Wetlands Topic at Stetson Law
19m ago MIRACA : Baylor, Miraca Holdings Agree to Joint Venture on Clinical Genetic Testing
20m ago FERC Issues Notice of Technical Conference and Environmental Site Review Re TransCanada Hydro Northeast Inc. Under P-1904
33m ago NANO LABS : How to Treat UTI Without Antibiotics; Company Nano Essentials Now Offering Complimentary Shipping
Latest news
Advertisement
Hot News 
BANCO ESPIRITO SANTO : Angola brings oil firm Sonangol into local BES bank
1SPATIAL : Interim Results for the six month period ended 31 July 2014
ULS TECHNOLOGY : Plunges As Improved Results Still Won't Meet Forecasts
REGIONAL MANAGEMENT : NYSE stocks posting largest percentage decreases
OPLINK COMMUNICATIONS : posts 1Q profit
Most Read News
1d ago J.P. MORGAN FOUND HACKERS THROUGH BREACH OF CORPORATE EVENT WEBSITE : media
1d ago GRUPO CARSO DE C V : Mexico could help realise Central America economic plan - ministry
1d ago EXCLUSIVE - U.S. PROBING STANDARD CHARTERED OVER DUBAI BANKING : sources
1d ago NETFLIX : Amazon hits back in on-demand TV war with Netflix: Comedy drama Transparent hailed as internet service's answer to House of Cards
1d ago Herbalife to pay $15 million to settle class action lawsuit
Most recommended articles
3h ago China's October factory growth unexpectedly hits five-month low - official PMI
3h ago CHINA'S OCT FACTORY GROWTH UNEXPECTEDLY HITS FIVE-MONTH LOW : official PMI
3h agoDJChina Manufacturing Falls to Five Month Low -- Update
1d ago J.P. MORGAN FOUND HACKERS THROUGH BREACH OF CORPORATE EVENT WEBSITE : media
1d ago Foreign access to China's card clearing market next August - report
Dynamic quotes  
ON
| OFF