BLBG: U.S. Stocks Are Little Changed Before Home-Sales Data
U.S. stocks were little changed ahead of a report on new-home sales as the Standard & Poor’s 500 Index headed for its biggest weekly drop of the year.
Micron Technology Inc. (MU) fell 3.3 percent after reporting a third consecutive quarterly loss as sluggish demand for personal computers dragged down chip prices. KB Home (KBH) slumped 11 percent after reporting first-quarter revenue that missed estimates. Zynga Inc. lost 3 percent after the chief executive officer said he will sell shares in a secondary offering.
The S&P 500 fell 0.1 percent to 1,391.90 at 9:41 a.m. in New York. The benchmark index for American equities is down 0.9 percent for the week. The Dow Jones Industrial Average lost 19.37 points, or 0.2 percent, to 13,026.77 today.
“The market is catching its breath a little,” Jim Russell, the Cincinnati, Ohio-based head equity investment strategist at U.S. Bank Wealth Management, which oversees about $103 billion, said in a telephone interview. “The data that came in yesterday is consistent with moderate slowdowns that are occurring in Europe and China. The market is keying off some of that slowdown. A few percentage-point pullback is going to prove to be healthy and be the pause that refreshes.”
U.S. stocks retreated yesterday as manufacturing contracted in China and Europe and FedEx Corp. (FDX) tumbled amid a disappointing forecast. The S&P 500 slumped 1.2 percent in three days. The gauge is still headed for its longest monthly rally since September 2009 as economic data topped forecasts and the European Central Bank disbursed more than 1 trillion euros ($1.3 trillion) to lenders.
Home Sales
New home sales rose to a 325,000 annual rate in February from 321,000 the previous month, according to a Bloomberg News survey of 78 economists ahead of a Commerce Department report at 10 a.m. New York time. That would be the fastest since December 2010.
Micron Technology fell 3.3 percent to $8.43. A glut of memory-chip production has sent prices tumbling, making it harder for Micron and its competitors to stay profitable. The picture may improve if the bankruptcy of Japan’s Elpida Memory Inc. reduces industry output, said Alex Gauna, an analyst at JMP Securities LLC in San Francisco.
KB Home, the Los Angeles-based homebuilder that targets first-time buyers, sank 11 percent to $10.03. Revenue in the first-quarter was $254.6 million, falling short of the average analyst estimate of $328.6 million.
Zynga (ZNGA) dropped 3 percent to $13.34. Mark Pincus, the chief executive officer of the social-gaming company that held its initial public offering in December, said he will sell shares worth about $227 million in a secondary offering.
Accenture Plc (ACN) gained 0.5 percent to $63.84. The world’s second-largest technology-consulting company raised its full- year earnings forecast to at least $3.82 a share, beating analysts’ average projection of $3.80.
To contact the reporter on this story: Inyoung Hwang in New York at ihwang7@bloomberg.net.
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
