Stocks sag, head for first weekly loss in a month

Weakness in tech, materials companies drag down markets

7/26/2013

NEW YORK — Weak results from several U.S. companies helped drag the stock market lower today, putting major indexes on course for their first weekly loss this month.

Many traders are also looking ahead to a packed schedule of events next week, including a Federal Reserve meeting and the government’s monthly employment report.

“There’s just a deluge of market-moving events next week,” said Jeffrey Kleintop, the chief market strategist for LPL Financial. “Traders seem to be erring on the side of caution today.”

Expedia plunged 25 percent, the worst fall in the Standard & Poor’s 500 index. The online travel agency reported earnings late Thursday that badly missed analysts’ expectations. Higher costs were the main culprit. Expedia lost $16.07 to $48.93.

Shortly after noon, the Standard & Poor’s 500 index was down seven points, or 0.4 percent, to 1,683. All 10 industry groups in the S&P 500 fell.

The Dow Jones industrial average dropped 95 points, or 0.6 percent, to 15,461. The Nasdaq composite fell six points, or 0.2 percent, to 3,598.

Before the market opened, Newmont Mining turned in a quarterly loss, largely a result of slumping prices for copper and gold. Analysts had predicted a slight profit. Newmont’s stock fell 77 cents, or 2 percent, to $29.25.

Starbucks posted results late Thursday that beat analysts’ estimates. Lower costs for coffee beans and better sales of salads and sandwiches helped. Starbucks jumped $4.44, or 7 percent, to $72.61.

It’s nearly halftime in the second-quarter earnings season, and corporate profits are shaping up better than some had feared.

Analysts forecast that earnings for companies in the S&P 500 increased 4.5 percent over the same period in 2012, according to S&P Capital IQ. At the start of July, they predicted earnings would rise 2.8 percent. Nearly seven out of every 10 companies have surpassed Wall Street’s profit targets.

The stock market hasn’t ended the week with a loss since June 21, when speculation that the Federal Reserve would start easing off its support for the economy rattled financial markets.

Kleintop cautioned against reading too much into the drop today or the weekly loss. The S&P 500 is still up 5 percent for the month and 18 percent for the year.

“It’s just one week down after four up,” he said. “If the market just goes higher and higher week after week, you would see a major swoon when it runs into some disappointing news.”

In the market for U.S. government bonds, the yield on the 10-year Treasury note rose to 2.57 percent from 2.48 percent late Thursday.

Long-term interest rates have moved in a wide range since early May as traders tried to anticipate the Fed’s next move. The yield hit a recent low of 1.63 percent on May 1, and went as high as 2.74 percent July 5.