Stocks end lower as earnings season rolls on
After suffering mild losses the day before, U.S. stocks fell deeper in the red Wednesday as traders encountered another big day of earnings reports, with blue chip names Coca-Cola, Boeing, American Express and General Motors releasing third-quarter results.
The Dow Jones industrial average drooped 50 points, or 0.3%. The Standard & Poor's 500 index closed down 0.6% and the Nasdaq composite dropped 0.8%. All three benchmarks finished near their session lows after each opened higher to start the day.
Wall Street is trading cautiously this earnings-reporting season, as profit growth for Standard & Poor's 500 companies is seen contracting this quarter for the first time since 2009. Still, the market has been holding up, as earnings expectations have been set low, raising the odds that the bulk of companies will top lowered forecasts.
The Dow has been in rally mode, finishing higher three straight weeks amid signs the Federal Reserve will not hike short-term interest rates until next year. The recent rebound rally follows the stock market's first 10%-plus drop, or correction, in four years.
Several Dow components reported earnings today
• Shares of Boeing (BA) jumped 1.8% after reporting earnings that beat Wall Street expectations and raised its profit outlook for the year.
• Coca-Cola (KO) reported profit fell in the third quarter but earnings still slightly beat estimates. The company cited foreign currency fluctuations as a factor and said the global environment remains challenging. Shares slipped 0.2%.
• American Express reports earnings after the closing bell. AXP stock was down 0.6% before the release,
In other corporate news:
Valeant Pharmaceuticals hurtled downward, with VRX losing around 19.2%, on an investment group's report claiming that the company is inflating drug sales through bogus transactions. The report from Citron Research compares the Canada-based company with the infamously defunct Enron.
Valeant shares plunge on negative research report
Luxury automaker Ferrari (RACE) went public Wednesday. In a sign of optimism, shares of its initial public offering priced at $52 per share after last night's closing bell, at the top of the $48 to $52 range. Shares opened trading at $60 a share this morning and were up 8% to $56.29.
Shares of burrito seller Chipotle Mexican Grill (CMG) tumbled 5.7% after its earnings fell short of Wall Street expectations. The report, released after last night's closing bell, cited higher labor costs and advertising and market costs.
Shares of Yahoo (YHOO) were also under pressure Wednesday after another disappointing earnings report last night. Yahoo shares were off 5.2% to $31.12.
Investors seem to be shrugging off a major stock sell-off in mainland China overnight, where the Shanghai composite index fell 3.1% and another index filled with small-company stocks declined more than 6%.
Outside China, global shares were trading higher. Japan's Nikkei 225 rose 1.9%. And in early trading in Europe, Germany's DAX was up 0.9% and the CAC 40 in Paris was 0.5% higher.