Stocks End Lower as Big Economic, Earnings Reports Loom

Wall Street
Richard Drew/AP
NEW YORK -- The stock market fell modestly on Tuesday as investors focused on a batch of big economic reports ahead.

On Wednesday, the government releases its look at economic growth in the spring quarter and the Federal Reserve finishes a two-day meeting. The next day, a report on China's manufacturing industry will give investors an update on the health of the world's factory floor.

For U.S. investors, the key news comes Friday, when the Labor Department releases its monthly report on the jobs market.

With traders cautious ahead of these reports, the market has drifted.

"So far, it seems like this week is about waiting for later this week," said Bill Stone, chief investment strategist at PNC Asset Management Group.

Stocks spent most of Tuesday wandering around the start line. Major indexes crept higher in the morning, following news that a gauge of consumer confidence hit its highest level in nearly seven years. Major indexes turned flat by midday then slid to a loss in the last hours of trading.

The Standard & Poor's 500 index (^GPSC) lost 8.96 points, or 0.5 percent, to close at 1,969.95.

The Dow Jones industrial average (^DJI) fell 70.48 points, or 0.4 percent, to 16,912.11, while the Nasdaq composite (^IXIC) slipped 2.21 points, less than 0.1 percent, to 4,442.70.

Telecoms were the only one of the 10 industry groups in the S&P 500 to rise as traders plowed into a range of telephone and cable stocks, including AT&T (T) and Verizon (VZ). The moves came after Windstream Holdings announced plans to move some of its network into a trust that won't pay income tax. Windstream's (WIN) stock jumped $1.30, or 12 percent, to $11.83.

This week marks the half-way point for second-quarter earnings, and the overall results look solid. Earnings are on track to climb 8.8 percent over the year. At the start of the earnings season, analysts predicted an increase of 6 percent.

Among the heavyweights turning in results Tuesday, Merck (MRK) reported a large sale and a tax benefit that helped it more than double second-quarter earnings, easily topping Wall Street's expectations. The drugmaker also raised its profit forecast for 2014. Its stock climbed 61 cents, or 1 percent, to $58.58.

A warning of lower profits from United Parcel Service (UPS) knocked its stock down. UPS said spending on technology to improve its service during the upcoming holiday season will take a cut out of its full-year earnings. The shipping company also said its second-quarter earnings fell 58 percent, though shipments and sales picked up. UPS sank $3.80, or 4 percent, to $98.86.

Even with earnings coming in, traders are mostly biding their time until the economic news hits.

"In the next three days we're going to get so much information on the state of the economy," said Jim Paulsen, chief investment strategist at Wells Capital Management. "It could change the landscape under our feet."

In other markets:

The price of oil fell on concerns about the strength of demand for oil and gasoline in the U.S., ahead of the weekly report on supplies from the Energy Department. Benchmark U.S. crude slipped 70 cents to $100.97 a barrel on the New York Mercantile Exchange.

What to Watch Wednesday:
  • Payroll processor ADP releases its monthly report on private-sector hiring at 8:15 a.m. Eastern time.
  • The Commerce Department releases its initial report on second quarter gross domestic product at 8:30 a.m.
  • The Federal Open Market Committee concludes its two-day meeting on interest rates and releases a statement at 2 p.m.
These major companies are scheduled to report quarterly financial results:
  • Boston Beer Co. (SAM)
  • Goodyear Tire & Rubber Co. (GT)
  • Kraft Foods (KRFT)
  • Phillips 66 (PSX)
  • MetLife (MET)
  • Southern Co. (SO)
  • Sprint (S)
  • Whole Foods Market (WFM)
  • Williams Cos. (WMB)
  • Yelp (YELP)

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socioeconomist1

At least the media didn't blame the Ukraine (not Gaza) this time around.... The old jobs report, as if anyone cares about that. We wouldn't have had a stock market recovery after 2009 if the freaking jobs report mattered.

It's all horse crap to explain the manipulation...

July 29 2014 at 7:54 PM Report abuse +1 rate up rate down Reply
thefacts22

Wall Street is full of cronies,the real truth is that the Market is inflated,and they "KNOW" that sooner than expected USA will have to deal with Oba,s debt

July 29 2014 at 5:15 PM Report abuse +3 rate up rate down Reply
2 replies to thefacts22's comment
dsb1252

Just can't face the truth or just keeping the hate going for the black man?

July 29 2014 at 5:49 PM Report abuse -2 rate up rate down Reply
socioeconomist1

Stocks are inflated, but Obama doesn't have anything to do with the economy or stock prices. America will never realize their debt... It will just keep getting bigger and bigger and currency will just keep losing value as time rolls along..

July 29 2014 at 7:52 PM Report abuse rate up rate down Reply
nucleansolutions

But......

July 29 2014 at 4:34 PM Report abuse rate up rate down Reply