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US: Caterpillar, Amex earnings disappointments push stocks lower
[NEW YORK] US stocks fell for a third straight day on Thursday on the back of disappointing earnings from Caterpillar, American Express and others.
The Dow Jones Industrial Average fell 119.09 points (0.67 per cent) to 17,731.95.
The broad-based S&P 500 dropped 12.00 (0.57 per cent) to 2,102.15, while tech-rich Nasdaq Composite Index lost 25.36 (0.49 per cent) at 5,146.41.
Dow members American Express (-2.5 per cent), Caterpillar (-3.6 per cent) and 3M (-3.8 per cent) all fell sharply following earnings reports. But General Motors gained 4.0 per cent after reporting second-quarter earnings that quadrupled from a year ago.
"Earnings overall have been better than expected, but still not very good," said David Lynch, portfolio manager at Kenjol Capital Management.
"The valuations on the market are not cheap... so we're going to need to see earnings growth for the market to make progress." Chipmaker Qualcomm fell 3.8 per cent after announcing it would slash its workforce by 15 per cent and study a possible breakup of the company. It reported that earnings for the quarter ending June 28 fell 47 per cent to US$1.2 billion.
Dow Chemical lost 4.5 per cent as chief executive Andrew Liveris warned on a conference call that "volatility and softness" prevail in key sectors of China, a key growth market for the chemical giant.
Metals and petroleum producer Freeport-McMoRan tumbled 9.4 per cent following a US$1.85 billion loss due mainly to large writedowns in its oil and gas properties. The loss also coincided with a fresh multi-year low for copper prices.
Under Armour, which makes athletic apparel and gear, surged 7.3 per cent after lifting its forecast. Sales for 2015 are now projected at US$3.84 billion, up from the prior estimate of US$3.78 billion.
Other companies to report included Comcast (-3.2 per cent), Eli Lilly (+0.4 percent), McDonald's (-0.5 per cent), Kimberly-Clark (-0.5 per cent) and United Airlines(-0.7 per cent).
Health insurer Cigna gained 2.2 per cent on reports it is near a deal to be acquired by rival Anthem for about US$48 billion. Anthem added 0.1 per cent.
Bank of America fell 1.5 per cent after it replaced chief financial officer Bruce Thompson with human resources executive Andrea Smith, whose title will be chief administrative officer.
Bond prices rose. The yield on the 10-year US Treasury fell to 2.27 per cent from 2.33 per cent Wednesday, while the 30-year dropped to 2.97 per cent from 3.04 per cent. Bond prices and yields move inversely.