BLBG: S&P 500 Has Longest Slump Since May As Technology Tumbles
U.S. stocks fell a fourth day, giving the Standard & Poor’s 500 Index its longest slump since May, as concern about technology earnings offset optimism with European officials’ steps to protect Spanish banks.
Applied Materials Inc. (AMAT) slumped 1.8 percent after cutting its forecasts. Advanced Micro Devices Inc. (AMD), the second-biggest maker of processors for personal computers, tumbled 9.8 percent after reporting an unexpected decline in sales. Utility, consumer staples and telephone shares in the S&P 500 advanced.
The S&P 500 fell 0.2 percent to 1,349.63 at 11:05 a.m. New York time. The Dow Jones Industrial Average slid 35.64 points, or 0.3 percent, to 12,700.65. Trading in S&P 500 companies was 6.3 percent below the 30-day average at this time of day.
“The news out of Europe is another step in the right direction, but there’s a long way to go there,” said John Canally, an economist and investment strategist at LPL Financial Corp. in Boston. The firm oversees about $330 billion. “Then there’s the earnings season here. As always, the forecast matters a lot more than what actually happened.”
Chipmakers in the S&P 500 tumbled 1.9 percent after Applied Materials’ forecast intensified concern about weakening corporate earnings. Profits for S&P 500 companies fell 1.8 percent in the second quarter, according to analyst estimates compiled by Bloomberg. That would be the first drop since 2009, even as revenue is projected to increase 2.5 percent.
Alcoa Inc. (AA), the first company in the Dow to report second- quarter results, dropped 2.9 percent to $8.51. Earnings and revenue at the largest U.S. aluminum producer beat analysts’ estimates after an increase in orders from the auto and aerospace industries. Alcoa had a second-quarter net loss of $2 million, or break even on a per share basis, compared with net income of $322 million, or 28 cents, a year earlier.
To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net; Julia Leite in New York at jleite3@bloomberg.net
To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net
