BLBG: U.S. Stocks Fluctuate on Earnings, Drop in Consumer Confidence
U.S. stocks fluctuated as companies from DuPont Co. to Lexmark International Inc. rallied on better- than-estimated earnings, while retailers slid after consumer confidence fell to a five-month low.
DuPont, the third-biggest U.S. chemical maker, and Lexmark, the maker of laser and inkjet printers, gained at least 3.9 percent. Amazon.com Inc. and Lowe’s Cos. Inc. retreated at least 2 percent to lead retailers to the biggest decline among 24 groups in the Standard & Poor’s 500 Index. U.S. Steel Corp., the country’s largest producer of the metal, slid 5.6 percent after reporting an unexpected second-quarter loss.
The S&P 500 slipped less than 0.1 percent to 1,114.72 at 12:35 p.m. in New York after gaining as much as 0.5 percent earlier to erase its loss for the year. The Dow Jones Industrial Average rose 23.69 points, or 0.2 percent, to 10,549.12.
“It’s one step forward, two steps back,” said Mike Ryan, New York-based head of wealth management research for the Americas at UBS Financial Services Inc., which oversees about $640 billion. “We’ve seen a very solid earnings season. The numbers have been consistently above expectations. I don’t believe the economy is rolling over. However, we need to get more data on the economic front.”
The Dow average erased its 2010 loss yesterday and the S&P 500 closed above its 200-day average, spurring optimism among chart analysts and investors who track earnings. Projections for the fastest S&P 500 income growth since 1988 are helping investors overcome concern that the economy will sink into its second recession in three years.
Earnings Season
Of the 179 companies in the S&P 500 that reported results since July 12, about 82 percent have beaten the average analyst profit forecast and earnings per share have grown 60 percent, according to Bloomberg data.
DuPont advanced 3.9 percent to $40.51 after reporting second-quarter profit that beat analysts’ estimates and raising its full-year earnings forecast amid improving global demand. Second-quarter profit excluding some items was $1.17 a share, topping the 94-cent average estimate of 10 analysts surveyed by Bloomberg.
Lexmark surged 9.9 percent to $38.26. The maker of laser and inkjet printers posted second-quarter revenue and profit that topped analysts’ estimates on improving equipment and services sales. Profit excluding some items was $1.23 a share, exceeding the 93-cent average of analysts’ estimates compiled by Bloomberg.
Confidence Slumps
Stocks erased an early advance after a report showed confidence among U.S. consumers declined in July, a sign the lack of jobs will limit the economy’s recovery. The Conference Board’s confidence index fell to 50.4 from a revised 54.3 in June, figures from the New York-based private research group showed today. The gauge was forecast to drop to 51, according the median estimate in a Bloomberg News survey.
A gauge of retailers, hotel and restaurant chains and other so-called consumer-discretionary companies fell 0.9 percent as a group, the most of 10 industries in the S&P 500, after the confidence data. Amazon lost 2.3 percent to $115.64, while Lowe’s dropped 2.1 percent to $21.35.
U.S. Steel declined 5.6 percent to $46.15. The largest steelmaker unexpectedly posted a second-quarter loss after revaluing a $1.4 billion loan made to a European unit.
To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net; Adam Haigh in London at ahaigh1@bloomberg.net.
