Lackluster earnings lead to end of Wall Street gains
A string of lackluster earnings reports from companies including Coca-Cola and Charles Schwab ended an eight-day winning streak for the Standard & Poor’s 500 index.
Coca-Cola, the world’s largest beverage maker, fell after the company said it sold less soda in its home market of North America. Retail brokerage Charles Schwab’s second-quarter earnings fell short of what analysts were expecting. Marathon Petroleum fell after the fuel refiner forecast weak earnings and said its business was being hurt by renewable fuels laws.
“The expectations out there for earnings overall, they’re pretty modest,” said Scott Wren, senior equity strategist at Wells Fargo. “Earnings season is not going to be what drives the market from here.”
The Dow Jones industrial average fell 32.41 points, 0.2 percent, to 15,451.85. The Standard & Poor’s 500 index declined 6.24 points, or 0.4 percent, to 1,676.26. The Nasdaq composite dropped 8.99 points, or 0.3 percent, to 3,598.50. Coke dropped 78 cents, or 1.9 percent, to $40.23 after the company reported that its second-quarter profit fell 4 percent. Charles Schwab fell 71 cents, or 3.3 percent, to $21 after its earnings came in short of analysts’ expectations as expenses rose and its interest margins fell. Marathon Petroleum fell $3.17, or 4.3 percent, to $69.93.
General Motors global sales rose 4 percent in first half
General Motors’ global sales grew almost 4 percent in the first half of the year, enough to fend off Volkswagen for second place and perhaps close the gap with sales leader Toyota.
GM said Tuesday that it sold 4.85 million cars and trucks worldwide from January through June. That puts GM on pace for sales of around 9.7 million for the year.
The Detroit automaker sold 9.3 million cars and trucks last year, about 450,000 less than Toyota Motor Corp. GM’s first-half U.S. sales rose by 8.7 percent to 1.4 million.
Home-builder confidence hits highest level in 7 years
A gauge of home-builder confidence in July hit the highest level in more than seven years, suggesting the interest-rate spike has yet to dampen industry confidence.
The National Association of Home Builders/Wells Fargo housing-market index rose in July for the third consecutive month, reaching 57 in July, the highest level since January 2006 from 51 in June. The sentiment gauge is up 63 percent from a year ago.
June’s result was the first above a key reading of 50 since 2006. Readings above 50 signal that builders, generally, are optimistic about sales trends. Confidence among builders is far higher than levels typically associated with current rates of new construction started for single-family homes.
– From news service reports