- Seattle socialist: Minimum-wage discussion skewed by ‘right-wing’ GAO analysis
- U.N. warns of Muslim ‘cleansing’ in Central African Republic
- Senate blocks change to military sex assault cases
- Drug mix may have cured child born with HIV, doctors say
- De Blasio’s wife irks former mansion chef with ‘servant’ remark
- Russia’s neighbors shiver amid Putin’s Cold War moves in Ukraine
- New SAT: The essay portion is to become optional
- Military group can’t march to honor the fallen at Boston Marathon due to security changes
- Senate passes bills deleting ‘retarded’ from laws
- China announces biggest military hike in 3 years: We are not ‘boy scouts with spears’
Stocks edge down at the start of big earnings week
NEW YORK (AP) — Investors remained cautious Monday at the start of a big week for company earnings on Wall Street.
About a third of the companies in the Standard & Poor’s 500 index, including Exxon Mobil and Apple, are reporting earnings this week. Analysts expect earnings to rise by 2 percent in the first quarter, down from the 7.7 percent increase in the fourth quarter, according to S&P Capital IQ.
While the majority of companies that have reported earnings so far have beaten investors’ expectations, concerns remain about the outlook for revenues for the rest of the year. Caterpillar added to those worries Monday when it lowered its forecasts for full-year sales and profits because its mining business is slowing.
“Most of the companies seem to be coming in ahead of earnings expectations, but the thing that’s still problematic is the revenue line,” said Bill Stone, chief investment strategist at PNC Wealth Management. “To me it’s just symptomatic of the global economy continuing to sputter along.”
The Dow Jones industrial average was down 44 points, or 0.3 percent, to 14,505 as of 11:56 a.m. EDT. The S&P 500 index was little changed at 1,556.
Stocks are coming off a tough week.
Last week, both the S&P 500 and the Dow lost 2.1 percent, the biggest weekly drops since November, paring their advances after a strong start to the year.
News that economic growth had slowed in China set off a plunge in commodity prices last Monday, leading the stock market to its worst day of the year. Gold dropped below $1,400 an ounce for the first time in two years.
Caterpillar was little changed at $80.85 after its earnings report. The company’s stock is down 9.9 percent this year.
Sales of previously occupied U.S. homes dipped in March, the National Association of Realtors said Monday. That decline also weighed on the market. Sales slipped to a seasonally adjusted annual rate of 4.92 million, from 4.95 million in February.
Investors have been looking at first-quarter earnings critically.
Traders appear more likely to punish companies that miss expectations, rather than reward companies that beat them, Goldman Sachs said. According to the investment bank’s research, while 63 percent of stocks that beat analysts’ forecasts last week performed better than the overall market the next day, 73 percent of those that missed targets performed worse.
“If you look at this earnings season in general, it’s been disappointing,” said Ryan Detrick, a senior technical strategist at Schaeffer’s Investment Research. “The outlook and the revenues are the big concern.”
Hasbro, the maker of Transformers and My Little Pony, rose $1.17 to $46.19 even after it said that its first-quarter loss widened after heavy restructuring charges and foreign exchange rates flattened its international sales. The company’s performance was still better than Wall Street had expected.
Oil services company Halliburton also gained after its loss wasn’t as bad as analysts had forecast. Halliburton rose $1.75 to $38.96 after it said that it had lost $18 million in the first quarter, pulled down by $637 million in charges related to its role in the 2010 Gulf of Mexico oil spill.
TWT Video Picks
By Tammy Bruce
- Bill Clinton cashes in on struggling nonprofit hospital
- Putin has transformed Russian army into a lean, mean fighting machine
- Aronofsky's 'Noah' banned in Qatar, Bahrain, United Arab Emirates
- Christine O'Donnell eager to re-engage in political debate
- Kim Jong-un calls for execution of 33 Christians
- Bill Clinton poses for photo with Bunny Ranch prostitutes
- DELAY: A revolution for the Constitution
- PRUDEN: Likening Putin to Hitler on Ukraine shows Hillary's shaky grasp of history
- Back to the Future: HUVr Tech marketing video goes viral with hoverboard release tease
- Russias Putin nominated for Nobel Peace Prize
Pope Francis meets his 'mini-me'
Celebrity deaths in 2014
Winter storm hits states — again