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Wall Street fall as earnings disappoint

Posted by: Admin | Posted on: April 28th, 2015 | 0 Comments

(Reuters) – U.S. stocks fell in volatile early trading on Tuesday as strong results from Merck and better-than-expected housing data helped offset disappointing earnings and profit-taking in Apple.

Investors were also awaiting the results of a two-day Federal Reserve meeting that ends on Wednesday for clues on when the central bank will hike interest rates.

Apple (AAPL.O) hit a record high before falling as much as 1.7 percent to $130.33 despite beating Wall Street’s revenue and profit forecasts. Up to Monday’s close, Apple’s stock had risen about 62 percent in the past 12 months.

Merck (MRK.N) rose 4.8 percent to $59.85, on track for its best day since January 2014, after its diabetes drug, Januvia, achieved the main goal in a safety study. The company also reported better-than-expected quarterly sales and earnings.

Coach (COH.N) shares slumped 7.4 percent to $39.11, putting it on track for its steepest fall since June, after the handbag and accessories maker’s quarterly sales fell short of estimates.

“Most of the big corporations are missing on revenue and eventually that’s going to hurt the markets as valuations stay high,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

U.S. single-family home prices rose more than expected in February from a year earlier, led by strong increases in the western half of the United States, a closely watched survey said on Tuesday.

At 10:06 a.m. EDT (1406 GMT) the Dow Jones industrial average .DJI was down 43.11 points, or 0.24 percent, at 17,994.86, the SP 500 .SPX was down 6.69 points, or 0.32 percent, at 2,102.23 and the Nasdaq Composite .IXIC was down 38.08 points, or 0.75 percent, at 5,022.17.

Of the SP 500 companies that reported results up to Monday, only 44.3 percent beat on revenue, below the 61 percent that beat in a typical quarter, according to Thomson Reuters data.

Dow component Pfizer (PFE.N) and home appliances maker Whirlpool (WHR.N) both cut forecasts, blaming the strong dollar. Whirlpool fell 6.4 percent to $185.32 while Pfizer slipped 0.1 percent to $34.55.

The dollar .DXY gained about 23 percent against a basket of major currencies over the financial year ended March 31, hurting companies with large overseas operations.

United Parcel Service (UPS.N) rose 2.1 percent to $99.53 after it reported higher first-quarter net profit due to price increases and productivity improvements, and reaffirmed its earnings outlook for 2015.

Declining issues outnumbered advancing ones on the NYSE by 1,465 to 1,287, for a 1.14-to-1 ratio on the downside; on the Nasdaq, 1,446 issues fell and 957 advanced for a 1.51-to-1 ratio favoring decliners.

(Editing by Savio D’Souza)

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