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US: Stocks end lower as Travelers, eBay tumble

Friday, October 21, 2016 - 06:51

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Earnings released Thursday were mixed, but Travelers, Verizon and eBay were among the companies that fell following disappointing reports.

[NEW YORK] US stocks finished a bit lower Thursday as oil prices retreated and disappointing earnings from Travelers and some other companies offset a strong report from American Express.

US oil prices, which hit a 15-month peak Tuesday, retreated due to profit-taking, analysts said.

Earnings released Thursday were mixed, but Travelers, Verizon and eBay were among the companies that fell following disappointing reports.

The Dow Jones Industrial Average dipped 0.2 per cent to 18,162.35.

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The broad-based S&P 500 shed 0.1 per cent to 2,141.34, while the tech-rich Nasdaq Composite Index declined 0.1 per cent to 5,241.83.

Meanwhile, American Express jumped 9.0 per cent as it lifted its full-year forecast following better-than-expected third quarter net profits. The outlook boosted hopes the credit card company was moving past the hit it received from ending partnerships with Costco and Fidelity Investments.

Travelers, another Dow component, slumped 5.8 per cent after reporting that third quarter net profit fell 29.6 per cent to US$716 million. Results suggested claim payouts were increasing more quickly than premiums, indicating a weaker profit outlook, analysts said.

Online marketplace eBay plummeted 10.8 per cent on disappointment over its sales outlook for the key holiday quarter. Analysts also said the company's efforts to reposition its platform were taking longer than expected.

Dow member Verizon dropped 2.5 per cent as third quarter net income fell 10.2 per cent to US$3.8 billion as it cited the hit from the recall and subsequent cancelation of the Samsung Galaxy Note 7 smartphone. The results also showed the drag from intensifying competition among wireless providers.

Walgreens Boots Alliance rose 5.0 per cent as it reported better-than-expected fourth quarter earnings and said it was delaying the time-frame for closing its deal to acquire rival pharmacy chain Rite Aid.

The deal is now expected to close by January 27, 2017 instead of October 27, 2016. Rite Aid rose 6.8 per cent.

AFP

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