Stocks fade, extending a weeklong slump

Stocks edge lower on Wall Street on busiest day for earnings reports; P&G, Zynga buck trend

Associated Press
Stocks edge higher, breaking a weeklong slump
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In this Wednesday, Oct. 24, 2012, photo, Specialists Jay Woods, left, and Donald Himpele work at the post that handles Bank of America on the floor of the New York Stock Exchange. Stock futures edged higher Thursday, Oct. 25, with some positive numbers coming out of the manufacturing sector and potentially more evidence of an improving jobs picture. (AP Photo/Richard Drew)

NEW YORK (AP) -- A weak showing in home sales and more disappointing earnings reports are sending stocks lower on Wall Street, extending a weeklong slide.

Stocks had started out higher early Thursday following a strong profit report from Procter & Gamble, but indexes started to weaken in late morning trading after a realtor group said that the pace of home purchase contracts was leveling off.

That turned the stocks of homebuilders sharply lower. PulteGroup was off 4 percent, giving up an early gain. D.R. Horton and Toll Brothers each fell 3 percent.

In midday trading Thursday the Dow Jones industrial average was off 26 points at 13,051. It had been up 87.

The Standard & Poor's 500 fell two points to 1,407 and the Nasdaq fell two points to 2,979.

The stock market has been in a slump for more than a week because of the weak revenue numbers and lower profit projections that have emerged from the latest round of corporate earnings reports.

The Dow gained 127 points Oct. 16 but since then has managed only two daily gains, both of them meager. The average has lost 474 points since that last significant increase.

Among companies reporting earnings Thursday, infant formula maker Mead Johnson Nutrition plunged $6.09 to $63.42 after its revenue came in well below what Wall Street analysts were expecting. The company also cut its forecast for full-year earnings.

Profits at United Airlines declined with fewer people flying, and the company fell well short of Wall Street expectations. The stock fell 77 cents to $19.50, a loss of 4 percent.

Homebuilders fell broadly after the pace of growth in pending home sales slowed last month. PulteGroup, which returned to profitability in the third quarter, gave up an early gain and was trading down 89 cents at $16.56. Toll fell $1.22 to $34.03 and D.R. Horton fell 69 cents to $20.72.

Procter & Gamble was the biggest gainer in the Dow after the consumer products company, whose products include Tide, Gillette and Charmin, reported earnings that beat analysts' expectations. P&G rose $2.55 to $70.63.

Online game maker Zynga jumped 26 cents to $2.39 after the company reported revenue that was stronger than analysts had anticipated. The company also said it would cut costs and enter the gambling business.

Health insurer Aetna rose 38 cents to $44.33 after reporting a 2 percent gain in third-quarter earnings. Higher revenue and lower-than-expected health care claims helped the company beat Wall Street's profit expectations.

Apple and Amazon.com report earnings after the market closes.

European and Asian markets were mixed. The price of crude oil edged down 3 cents to $85.70 per barrel in New York after a week of heavy selling.

As investors moved into stocks, they sold U.S. government bonds, sending yields higher. The benchmark 10-year U.S. Treasury note yielded 1.81 percent, up from 1.79 percent late Wednesday.

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