U.S. stocks slide as market heads for weekly loss
NEW YORK — U.S. stocks dipped Friday morning, the capstone to a disappointing week shaped by unimpressive earnings.
Trading volume was light, typical of an August Friday, and there was little economic news to move the market.
The Dow Jones industrial average was down 125 points, or 0.8 percent, to 15,373 as of noon. The Standard & Poor’s 500 index was down eight points, or 0.5 percent, to 1,688. The Nasdaq composite was down 13 points to 3,655.
“There’s no specific culprit here, but the market seems to be tired,” said Robbert Van Batenburg, director of market strategy at Newedge in New York. “There’s not a lot of people at their desks.”
J.C. Penney was one of the few companies making news. Shares fell 7 percent as the company’s board bickered with its largest shareholder, hedge fund manager Bill Ackman, over finding a permanent CEO. The stock was down 91 cents to $12.75.
Wholesale inventories were the only major economic gauge that the government released Friday. It tends to be watched less closely than other indicators like the unemployment rate or retail sales, but in a vacuum of other news, investors reacted. Stock indexes darted between the tiniest of gains and losses in the early morning, then turned decisively downward after the government reported at 10 a.m. that U.S. wholesalers cut their stockpiles for a third straight month, an indication that they’re uncertain about future demand, even as sales increased.
Economic data from China came in, for the most part, better than expected, with inflation steady and industrial production up. The effect on the overall market was muted, but commodities-dependent companies, such as Peabody Energy and fertilizer maker Mosaic, were higher. Van Batenburg cautioned that the news, which followed reports Thursday of a recovery in China’s trade, didn’t signal that the world’s second-largest economy was healed.
“It’s one data point, it’s not a panacea,” Van Batenburg said. “I think the jury is still out on China”
The week has been largely disappointing for investors. Thursday, when the China trade data was released, was the only day so far that the S&P 500 ended higher, and the rest of the week has been shaped by unimpressive company earnings.
Profits at S&P 500 companies have been up less than 5 percent in the second quarter, according to S&P Capital IQ. At the beginning of the year, analysts were expecting 9 percent.
Even that earnings increase has been built not on business growth but on cost-cutting. Revenue is down 0.6 percent so far this quarter.
The S&P 500 is headed for its first weekly loss in seven weeks. It closed at a record high of 1,709 a week ago.
Among stocks making big moves:
— BlackBerry jumped after Reuters reported that the company may be growing more amenable to going private. The stock rose 45 cents, or 5 percent, to $9.68.
— Priceline.com rose a day after the travel website announced earnings that trumped analyst expectations. The stock rose $46.79, or 5 percent, to $980.50. If the stock goes above $1,000, it would be the first in the S&P 500 to do so.