Weak earnings tug stocks lower on Wall Street
NEW YORK • Disappointing earnings news and a slump in bank stocks tugged the stock market down Wednesday, giving major indexes their first three-day drop since June.
Banks had some of the biggest losses following news that the government filed lawsuits accusing Bank of America of misleading investors.
The Standard & Poor's 500 index fell 6.46 points, or 0.4 percent, to close at 1,690.91. Seven of the index's 10 industry groups ended lower.
The Dow Jones industrial average fell 48.07 points, or 0.3 percent, to 15,470.67. The Nasdaq composite lost 11.76 points, or 0.3 percent, to 3,654.01.
The S&P 500 has drifted down 1.1 percent since reaching an all-time high of 1,709.67 on Friday. Trading has been thin this week, and warnings of slowing sales and tepid quarterly results have given investors no reason to push the market higher.
"I'm not concerned about the market being down over a few days given how much it's run up," said Paul Zemsky, the head of multi-asset strategies at ING Investment Management. "Put it in context, and it's not concerning."
The S&P 500 index closed above 1,700 points for the first time last Thursday and has already surged 18.6 percent this year. If the broad-market measure stays put for the rest of 2013, it would still be the S&P 500's best year since 2009.
In separate lawsuits filed Tuesday, the Justice Department and the Securities and Exchange Commission said the country's second-largest bank failed to tell investors about the risks involved in a 2008 sale of mortgage-backed bonds. BofA fell 11 cents, or 1 percent, to $14.53.
Walt Disney reported quarterly earnings late Tuesday that narrowly beat Wall Street's estimates, but revenue came up short. Disney's executives also said the company will have to take a steep charge from a weak box-office welcome for "The Lone Ranger" movie this summer. Disney slumped $1.14, or 2 percent, to $65.91.
As the second-quarter earnings season winds down, the overall picture looks mixed. Most companies have reported better earnings along with weaker revenue.
In other trading Wednesday, crude oil fell 93 cents, or 0.9 percent, to settle at $104.37 a barrel. Gold gained $2.80 to $1,285.30 an ounce.
The yield on the 10-year Treasury note fell to 2.60 percent from 2.64 percent late Tuesday.
Among other companies in the news:
Ralph Lauren Corp. dropped $16.38, or 9 percent, to $173.13. Sluggish sales led the luxury retailer to report a drop in quarterly income early Wednesday. The company also gave a cautious sales forecast.
First Solar fell $6.28, or 13 percent, to $40.47. The company posted results late Tuesday that fell short of Wall Street's expectations. First Solar also cut its profit outlook.
Zillow, which operates a real-estate website, dropped $6.98, or 8 percent, to $83.73. After the market closed Tuesday, the company reported a loss in the second quarter as its costs nearly doubled.