The American flag and a sign for Wall St. are shown outside the New York Stock Exchange, Monday, July 15, 2013 in New York. Weaker-than-expected U.S. retail sales sent most world stock markets lower Tuesday July 16, 2013 as investors awaited congressional testimony from Federal Reserve chairman Ben Bernanke later in the week. (AP Photo/Mark Lennihan)
NEW YORK — A string of lackluster earnings reports from companies including Coca-Cola and retail brokerage Charles Schwab pushed stocks lower today.
Coca-Cola, the world’s largest beverage maker, fell after the company said it sold less soda in its home market of North America. Retail brokerage Charles Schwab’s second quarter earnings fell short of the expectations of analysts. Marathon Petroleum, a fuel refiner, fell after the company forecast weak earnings and said its business was being hurt by renewable fuels laws.
“Earnings are taking the lead at this point in time,” said Brad Sorensen, Charles Schwab’s director of market and sector research. “So far it’s been decent, but nothing to get excited about.”
The Dow Jones industrial average fell 43 points, 0.3 percent, to 15,440 as of 1:43 p.m. Eastern Daylight Time. The Standard & Poor’s 500 index declined eight points, or 0.5 percent, to 1,674. The Nasdaq composite dropped 11, or 0.3 percent, to 3,596.
Nine of the 10 industry groups in the S&P 500 fell. The declines were led by energy companies. Phone companies were the only group to gain.
Coke dropped 54 cents, or 1.3 percent, to $40.47 after the company reported that its second-quarter profit fell 4 percent. Charles Schwab fell 70 cents, or 3.3 percent, to $21 after its earnings came in short of analysts’ expectations as expenses rose and its interest margins fell. Marathon Petroleum fell $3.81, or 5.3 percent, to $69.23.
“Expectations for earnings growth this quarter are fairly subdued,” said Michael Sheldon, chief market strategist for RDM Financial Group. “However, the important thing for investors is to look ahead to the second half of the year, where earnings are supposed to pick up significantly.”
Overall S&P 500 earnings are expected to grow by 3.4 percent in the second quarter from the same period a year ago, according to data from S&P Capital IQ. The rate of earnings growth is predicted to rise in the third and fourth quarters, reaching 11.6 percent in the final three months of the year.
The stock market has climbed back to record levels following a brief slump in June, when the S&P 500 logged its first monthly decline since October on concern that the Federal Reserve would ease back on its economic stimulus too quickly. The S&P 500 gained for eight straight trading sessions through Monday, its longest winning streak since January. If the index were to end higher today, it would mark the longest series of advances since 2004.
Stocks got a boost last week when Fed Chairman Ben Bernanke said the central bank would not ease its stimulus before the economy was ready.
Investors will be listening to comments from Bernanke again this week for more clues about the central bank’s outlook for the economy. The Fed chairman will give his semi-annual testimony to Congress on Wednesday.
Esther George, the President of Kansas City branch of the Fed, and a voting member of the committee that sets out the Fed’s monetary policy, said today that the central bank should cut back on its stimulus as the labor market begins to recover. The central bank is currently buying $85 billion of bonds a month to keep interest rates low and to encourage borrowing and hiring.
“It is time to adjust those purchases,” George said in an interview on Fox Business News. “Sooner is appropriate, to begin now, because we have a long way to go if we are going to do this in a gradual and a systematic way.”
In government bond trading, the yield on the 10-year Treasury note was unchanged from 2.54 percent Monday. The yield, which moves inversely to its price, has fallen since surging as high as 2.74 percent July 5.
In commodities trading, the price of crude oil fell 45 cents, or 0.4 percent, to $105.92 a barrel and gold rose $6.90, or 0.5 percent, to $1,290.40 an ounce.
The dollar fell against the euro and the Japanese yen.
Among other stocks making big moves:
— Heidrick & Struggles International dropped $2.77, or 16 percent, to $15.09 after the executive search firm said it is longer pursuing a sale of its business and that its CEO is stepping down.
— Ford fell 60 cents, or 3.5 percent, to $16.52 after Goldman Sachs removed the carmaker from its “conviction buy list” due to a lack of catalysts to push the company’s stock higher in the near future. Ford has gained 27 percent this year.
— Goldman Sachs dropped $3.02, or 1.9 percent, to $159.90 as investors focused on the outlook for the bank’s regulatory environment, even after the bank said its profit doubled in the second quarter.