Skip to content
Business
Link copied to clipboard

Stocks slip as earnings reports fail to impress

NEW YORK - Stocks edged lower Monday as investors began another big week of company earnings and looked ahead to a policy meeting of the Federal Reserve.

NEW YORK - Stocks edged lower Monday as investors began another big week of company earnings and looked ahead to a policy meeting of the Federal Reserve.

Companies from Apple to Xerox are reporting earnings this week. About one-third of the way through the quarterly earnings season, the results so far have been "nothing spectacular," says investment strategist Kristina Hooper of Allianz Global Investors.

More troubling than the middling income reports, Hooper says, is that many companies are failing to meet analysts' forecasts for revenue: "What we really should be focusing on is the revenue picture, and that's more negative."

The Federal Reserve will meet Tuesday and Wednesday, and while the central bank has said it wants to raise interest rates soon, few investors expect that to happen this year, because the global economy remains weak. The Fed left interest rates untouched in September, which helped set off a rally that pulled stocks out of the red for 2015 last week.

The Standard & Poor's 500 index dipped 3.97 points, or 0.2 percent, to 2,071.18. The S&P 500 remains positive for the year. The Dow Jones industrial average, which is still negative for the year, fell 23.65 points, or 0.1 percent, to 17,623.05. The Nasdaq composite rose 2.84 points, less than 0.1 percent, to 5,034.70.

Companies continue to combine. Intercontinental Exchange, the owner of the New York Stock Exchange and other stock markets, said it would buy the privately held market data company Interactive Data for $5.2 billion. Duke Energy, the biggest electric company in the United States, said it would buy Piedmont Natural Gas for about $4.9 billion. Piedmont surged $15.60, or 37 percent, to $57.82.

Russ Koesterich, global chief investment strategist for BlackRock, said he expected the current wave of company deals to continue as global economic growth remains gradual and borrowing costs remain low. The boost that the stock market gets from those deals, however, might not be as long-lasting, he said. Deals have given the market "a bit of a sugar high," Koesterich said, driving stocks higher despite disappointing company results.

In economic news, the government reported an unexpected drop in new home sales. Sales fell to their slowest pace in 10 months in September, hit by higher home prices and softer economic growth. That helped send homebuilder shares lower. KB Home fell 14 cents, or 1 percent, to $13.83.

U.S. crude oil lost 62 cents, or 1.4 percent, to close at $43.98 a barrel in New York.