Weak results slow Wall Street
THE Dow and S&P 500 slipped yesterday after JP Morgan’s earnings and China’s soft trade data revived worries about the impact of slower growth on profits.
The declines put an end to three straight days of gains that capped off a 12 per cent increase in the S&P 500 since hitting a low on 4 October. The Nasdaq stayed in positive territory, helped by semiconductor shares.
Some analysts said a pause was in store for the market, given the S&P 500’s recent advance. The benchmark S&P 500 has had its largest seven-day rise since March 2009 on growing optimism that European leaders will find a way to contain the region’s debt problems.
JP Morgan Chase, the second-largest US bank, slid 4.8 per cent and was the biggest drag on the Dow after reporting a drop in its third-quarter net profit. The news followed disappointing results from Alcoa on Tuesday.
“It’s early, but it seems like after having a series of great corporate earnings in the face of not-such-great macro numbers, now maybe we’re seeing a little bit less robust corporate earnings” said Eric Kuby, chief investment officer of North Star Investment Management.
Healthy US profits have been among the biggest drivers for stocks since their March 2009 lows.
The Dow Jones industrial average fell 40.72 points, or 0.35 per cent, to end at 11,478.13. The Standard & Poor’s 500 Index shed 3.59 points, or 0.30 per cent, to 1,203.66. But the Nasdaq Composite Index gained 15.51 points, or 0.60 per cent, to close at 2,620.24.
After the bell, shares of Google rose 5.4 per cent after it reported revenue that exceeded Wall Street’s expectations.
About 7bn shares were traded on the New York Stock Exchange, NYSE Amex and Nasdaq for the day, below the year’s daily average so far of about 8bn.