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US stocks edge lower after a six-day rise

Stocks closed higher Tuesday giving Standard   Poor’s 500 index its fourth garow.| AP file photo

Stocks closed higher Tuesday, giving the Standard & Poor’s 500 index its fourth gain in a row.| AP file photo

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Updated: April 23, 2014 4:09PM



NEW YORK — Stocks edged mostly lower Wednesday, breaking a six-day winning streak, as investors reacted to another round of quarterly earnings reports from U.S. companies.

Telecommunication companies were also hit following quarterly results from AT&T, while airline stocks rose, helped by Delta Air Lines.

A worse-than-expected economic report on the housing market also weighed on the broader market. Homebuilder stocks fell broadly.

The Standard & Poor’s 500 index lost 4.16 points, or 0.2 percent, to 1,875.39. The Dow Jones industrial average lost 12.72 points, or 0.1 percent, to 16,501.65 and the Nasdaq composite fell 34.49 points, or 0.8 percent, to 4,126.97.

The S&P 500 had risen six days in a row before Wednesday. It is not unusual for the stock market to pause after such a rally.

“The market, even with those six days of gains, is still struggling to choose a direction,” said Joseph Tanious, a global market strategist with J.P. Morgan Funds.

Once again, the high-flying biotechnology and technology stocks were among the hardest hit.

Surgical robot maker Intuitive Surgical fell the most in the S&P 500, plunging $48.40, or 12 percent, to $373.93. The company reported a 77 percent drop in first-quarter earnings and sold half has many robots as it did in the same period a year earlier. The company warned two weeks ago that earnings would come in far below expectations, causing its stock to fall sharply from a recent high of $540.63 reached April 3.

Amgen fell 5 percent after it also reported a steep drop in quarterly earnings, missing analysts’ expectations.

One bright spot in biotechnology was Gilead Sciences. The drugmaker rose $1, or 1.4 percent, to $73.86 after the company reported a surge in first-quarter earnings. Gilead’s drug Sovaldi, a new treatment for Hepatitis C, had $2.3 billion in sales in the first quarter alone, which beat the record for any drug in its first whole year on the market. While Sovaldi has a 90 percent success rate in curing Hepatitis C, the drug has a price of $1,000 per pill, or around $84,000 for a typical course of treatment.

AT&T, despite posting quarterly results that beat analysts’ expectations, wasn’t able to impress investors this quarter. The Dow member’s shares fell $1.37, or 4 percent, to $34.92. The company reported earnings of 71 cents a share, one cent ahead of analysts’ expectations, and quarterly sales of $32.48 billion, which also beat expectations.

Other telecom stocks also fell. Verizon fell 49 cents, or 1 percent, to $47.43 while T-Mobile US lost $1.28, or 3.8 percent, to $29.81.

Airline stocks were among the biggest advancers. Delta Air Lines rose $2.14, or 6 percent, to $37.09. Delta’s first-quarter earnings climbed after the company filled more seats on planes and paid less for fuel. Delta was the biggest gainer in the S&P 500.

Plane maker Boeing rose $3.08, or 2.4 percent, to $130.63. Its quarterly earnings beat expectations as its commercial jet production increased.

U.S. company earnings have been generally coming in better than what investors had expected. But expectations are low this quarter, investors said, because the harsh winter earlier this year slowed business activity across the country. Earnings in the S&P 500 are expected to be down 1.5 percent from a year ago, according to FactSet.

“When you set the bar so low, U.S. companies are able to walk right over them,” Tanious said.



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