Stock market slips lower on weak earnings

Stock indexes slip for third day this week; UnitedHealth, eBay lower after earnings

Associated Press
Stock market slips on weak earnings
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In this Tuesday, April 16, 2013, photo, Trader John Yaccarine, left, and specialists Mark Otto, center, and Christopher Malloy, work on the floor of the New York Stock Exchange Tuesday, April 16, 2013. Disappointing earnings results weighed on the stock market in early trading on Thursday, April 18, 2013, following two steep drops this week. (AP Photo/Richard Drew)

NEW YORK (AP) -- Disappointing earnings from a range of companies pushed the stock market lower on Thursday, giving major indexes their third loss this week.

The stock prices of Morgan Stanley, UnitedHealth Group and others sank after they turned in weaker quarterly results. Prices of commodities held steady following a wild couple of days.

Shortly after 2:30 p.m., the Standard & Poor's 500 index was down 11 points to 1,540, a decline of 0.7 percent.

Compared with the steep drops earlier this week, the losses on Thursday looked tame. The S&P 500 lost 2 percent on Monday, its worst day of the year, when a slowdown in China's economic growth set off a rout in prices for gold, oil and other commodities and pummeled the stocks of companies that make them. After reaching an all-time high a week ago, the index has slumped 3 percent.

Profit slipped at Morgan Stanley as the bank made less money from trading bonds and commodities, a common theme for many investment banks this earnings season. Morgan Stanley lost 3 percent to $20.48.

UnitedHealth's profit fell short of analysts' estimates, and the country's largest health insurer said it expects federal budget cuts to pressure its earnings this year. Its stock lost 4 percent to $59.58.

Ebay fell 5 percent to $53.03 after the online auction company cut its forecast for profit in the current quarter.

The market didn't get any help from economic news Thursday.

The Philadelphia branch of the Federal Reserve reported a slowdown in manufacturing in the mid-Atlantic region.

The market's drop was tempered by better profits at Verizon, Pepsi and Union Pacific. Verizon Communications' profit beat analysts' predictions as wireless revenue kept rising at a rate 8.6 percent, the envy of the industry. Profit and revenue for Pepsi also surpassed estimates.

Verizon's stock gained 3 percent to $51.23, while Pepsi's climbed 3 percent to $81.42.

Higher shipping rates pushed Union Pacific's profit up 11 percent, and the railroad said it expects to ship more goods later this year. Union Pacific rose 4 percent to $142.72.

After the market closes, the tech sector weighs in with earnings from IBM, Google and Microsoft.

Analysts have set a low bar for first-quarter earnings. They estimate companies in the S&P 500 will report that earnings climbed 1.5 percent from a year earlier, led by telecom. So far, companies are topping those estimates. Of the 61 companies that turned in results through Wednesday, 39 of them have exceeded forecasts.

In other trading, the Dow Jones industrial average fell 81 points to 14,537, down 0.6 percent. The Nasdaq composite fell 40 points to 3,164, down 1.2 percent.

In the market for U.S. government bonds, Treasury prices rose and their yields fell as traders moved money into low-risk assets. The yield on the 10-year Treasury note slipped back to 1.68 percent, near its lowest level of the year. That was down from 1.70 percent late Wednesday.

Commodities prices held steady following sharp falls earlier this week. Crude oil was little changed at $87 a barrel and copper was up 2 cents at $3.21 a pound. Gold edged up $4 to $1,387 an ounce.

Crude has lost $10 a barrel over the past two weeks as the outlook for the global economy weakens and oil supplies remain high. Gold fell 9 percent, its biggest plunge in 30 years, on Monday as inflation in the U.S. remained weak and rising concerns that European central banks might start selling gold.

"Earnings are always important," said Randy Frederick, managing director of active trading and derivatives at the brokerage Charles Schwab. "But this week they've taken a back seat to all the other headlines, like slower growth in China, the sharp sell-off in gold and then the bombing in Boston."

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