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U.S. Stocks Decline as Earnings Miss Analyst Estimates

*from www.bloomberg.com, April 17, 2013 (To view original article click here.)

Take Away #1: U.S. stocks fell, erasing the biggest rally in three months for the S&P 500 Index amid disappointing results by companies.

Key Facts and Figures:

  • All 10 groups in the S&P 500 declined.
  • Investors sold shares of companies most tied to economic growth, sending commodity producers lower.
  • Technology stocks fell as Apple Inc. tumbled below $400 for the first time since 2011.
  • Bank of America lost 6% after profit missed analysts’ projections.
  • Textron slumped 13% after lowering its forecast on business-jet sales.
  • Caterpillar Inc. slid 2.2% after Macquarie Group Ltd. cut its rating on shares.
  • The S&P 500 declined 1.6% to 1,549.41 at 1:27 p.m. in New York.
  • The index surged 1.4% yesterday, following a 2.3% loss on April 15.
  • The Dow Jones Industrial Average lost 152.76 points, or 1%, to 14,604.02.
  • Trading in S&P 500 was 42% higher than the 30-day average at this time of day.

Take Away #2: Companies from American Express Co. to eBay Inc. are among those in the S&P 500 that report earnings today.

Key Facts and Figures:

  • Of the 55 that have reported so far this season, 69% have beaten estimates for profit and 51% have exceeded forecasts for sales.
  • Profits at S&P 500 companies dropped 1.4% in the first three months of the year, according to analyst estimates compiled by Bloomberg.

Take Away #3: The S&P 500 has fallen since reaching an all-time high just last week as China’s economic growth slowed and data on American employment and retail sales missed economists’ estimates.

Key Facts and Figures:

  • The S&P 500 surged 10% in the first quarter of this year and reached an all-time high of 1,593.37 on April 11.
  • The index has since fallen 2.7%.

Take Away #4: The Federal Reserve releases its Beige Book report at 2 p.m. in Washington.

Key Facts and Figures:

  • The survey analyzes economic conditions in 12 U.S. districts.
  • Fed Chairman Ben S. Bernanke said on April 8 that “the economy is significantly stronger that it was four years ago, although conditions are clearly still far from where we would all like them to be.”

Take Away #5: U.S. stocks began short-term declines in April for the last three years.

Key Facts and Figures:

  • The S&P 500 fell 9.9% between April 2 and June 1 of last year.
  • The S&P 500 peaked on April 20, 2011, before a 19% slide ending that October.
  • The index tumbled 16% from a peak in April 2010 to July 2 of that year.
  • The market may be due for a similar pullback this year because its advance since mid-November has been “out of sync” with weak earnings and slower economic growth, Jonathan Golub of UBS AG wrote.
  • “While we’re not inclined to invest based on some simple rule or rhyme, those investors who followed the old adage ‘Go Away in May’ have done quite well in each of the past three years,” wrote Golub.

Take Away #6: The VIX surged 22% to 17.07 today.

Key Facts and Figures:

  • The VIX, which moves in the opposite direction of the S&P 500 about 80% of the time, surged 43% on April 15, the most since August 2011.
  • The gauge is down 5.5% this year.

Take Away #7: Financials, energy, and metals see declines.

Key Facts and Figures:

  • Bank of America, the last of the fur biggest U.S. lenders to report results, declined 6% to $11.54.
  • The bank posted first-quarter earnings of 20 cents a share, compared with a 23-cent estimate for adjusted earnings of analysts surveyed by Bloomberg.
  • The Morgan Stanley Cyclical Index retreated 2.4%.
  • Energy stocks fell 1.9%.
  • Exxon Mobil Corp. slumped 0.6% to $86.09.
  • Schlumberger Ltd. erased 2.9% to $71.19.
  • Freeport-McMoRan Copper & Gold Inc. plunged 5.2% to $27.73.
  • The largest publicly traded copper producer has dropped for the past six days.

Take Away #8: Technology companies retreated 2.2%.

Key Facts and Figures:

  • Apple plunged 5.2% to $403.90, briefly falling below $400 for the first time since December 2011.
  • Apple’s audio-chip supplier, Cirrus Logic Inc. reported an inventory glut that suggests iPhone sales may fall short of analysts’ estimates.
  • Cirrus Logic plunged 15% to $18.29.
  • Intel Corp. slipped 0.4% to $21.83 after it reported first-quarter net income fell 25% to $2.05 billion as sales slumped 2.5%.
  • Yahoo! Inc. dropped 0.3% to $23.71 and forecast second-quarter sales, excluding money passed to partner sites, of $1.09 billion.
  • Analysts had projected revenue of $1.11 billion.
  • Textron slid 13% to $25.50 after saying business jet deliveries will probably fall this year.
  • Textron previously forecast a “modest” increase.
  • First-quarter profit was 40 cents a share, missing the average analyst estimate by 5 cents.

Take Away #9: Caterpillar and Deere fall while Mattel and Abbot Labs see gains.

Key Facts and Figures:

  • Caterpillar erased 2.2% to $80.82.
  • Macquarie analyst Sameer Rathod cut the company to neutral from outperform, citing “tepid” growth in China that will continue longer than anticipated.
  • Rathod also lowered his rating for Deere & Co. to neutral, saying the agriculture and turf business are unlikely to be immune from lower equipment demand.
  • Deere sank 1.4% to $81.98.
  • Mattel Inc. gained 2.9%, the biggest rally in the S&P 500, to $44.24.
  • The toymaker posted first-quarter earnings of 11 cents a share, topping the 8-cent profit estimated by analysts on average.
  • Abbott Laboratories climbed 1.7% to $37.02.
  • The medical device and nutritional products maker split off its drug unit on Jan. 1.
  • Abbot said first-quarter profit rose 55% on higher sales of its baby formula and lower taxes.

*To view original article from www.bloomberg.com click here.

Filed in: Latest, Markets

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