Wall St Dips on Profit Quality Worries
Source: http://feedproxy.google.com/~r/ContrarianProfits/~3/TdwQeYVq-Jg/19171Posted on Friday, July 17th, 2009 | In Market Commentary
U.S. stocks fell today, Friday, on worry over the quality of corporate profits after General Electric Co. missed quarterly estimates, discouraging investors after a four-day run-up in Wall Street.
GE’s profit fell by almost half as the slump that has gripped its finance and media businesses took hold of its heavy industrial units, and shares of the conglomerate tumbled 6 percent to $11.66.
Shares of Google fell nearly 3 percent to $430 after news that the weak economy and a slump in advertising spending took a toll on revenue growth at the Internet giant. Its results, posted late on Thursday, beat Wall Street expectations, however.
With companies such as Intel Corp and Goldman Sachs Group posting strong quarterly results earlier in the week, investors had been eager to see some consistency from other bellwether names.
Bank of America posted lower earnings and Citibank relied on a gain off its Smith Barney deal with Morgan Stanley to turn a profit.
“So far earnings season is good, but if you were to call it revenue season it’d be more of a mixed bag,” said Peter Boockvar, equity strategist at Miller Tabak & Co in New York.
“What this shows is that companies are able to deal with cost structure, but light revenue shows that we’re still in a difficult economic environment.”
The Dow Jones industrial average <.DJI> gained 9.97 points, or 0.11 percent, to 8,721.79. The Standard & Poor’s 500 Index <.SPX> shed 1.49 points, or 0.16 percent, to 939.25. The Nasdaq Composite Index <.IXIC> dropped 4.13 points, or 0.22 percent, to 1,880.90.
A spike in shares of International Business Machines Corp helped buoy the Dow industrials, after the company raised its full-year earnings forecast late on Thursday. IBM shares gained 3.5 percent to $114.53.
On the economic front, data showed U.S. housing starts and building permits jumped more than expected in June, propelled by a rise in single-family homes.
Shares of DR Horton , up 4 percent to $10.05, helped boost the Dow Jones home construction index <.DJUSHB> 3.1 percent.
NEW YORK, July 17 (Reuters)
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