Active Stocks
Tue Mar 19 2024 14:31:08
  1. Tata Consultancy Services share price
  2. 3,986.00 -3.83%
  1. Tata Steel share price
  2. 149.55 -0.03%
  1. Bharti Airtel share price
  2. 1,234.25 0.75%
  1. Power Grid Corporation Of India share price
  2. 260.00 -1.89%
  1. ITC share price
  2. 409.90 -1.80%
Business News/ Market / Stock-market-news/  Wall Street edges off 5-year high, awaits earnings
BackBack

Wall Street edges off 5-year high, awaits earnings

Most sectors down, led by utilities and energy; 10 US banks to pay $8.5 bn to end foreclosure reviews

The Dow Jones industrial average dropped 50.92 points, or 0.38%, to 13,384.29. The Standard & Poor’s 500 Index fell 4.58 points, or 0.31%, to 1,461.89. Photo: AFP (AFP )Premium
The Dow Jones industrial average dropped 50.92 points, or 0.38%, to 13,384.29. The Standard & Poor’s 500 Index fell 4.58 points, or 0.31%, to 1,461.89. Photo: AFP
(AFP )

New York: US stocks lost ground on Monday, as investors drew back from recent gains that lifted the S&P 500 to a five-year high, in anticipation of sluggish growth in corporate profits.

Shares of financial companies dipped after a group of major US banks agreed to pay a total of $8.5 billion to end a government inquiry into faulty mortgage foreclosures. The KBW bank index, a gauge of US bank stocks, was down 0.3%.

Other sectors were hit as well, most notably energy and utilities. The S&P 500 energy sector index fell 0.8% and the utilities sector was off 1.1%.

The day’s decline came a session after the S&P 500 finished at a five-year high, boosted by a budget deal and strong economic data. The S&P 500 rose 4.6% last week, the best weekly gain in more than a year.

“It’s a little bit of taking some risk off the table ahead of profit season, you’re not going to see anything all that great" on earnings, said Larry Peruzzi, senior equity trader at Cabrera Capital Markets Inc in Boston.

Earnings are expected to be only slightly better than the third-quarter’s lackluster results, and analysts’ current estimates are down sharply from where they were in October. Fourth-quarter earnings growth is expected to come in at 2.8%, according to Thomson Reuters data.

Aluminium company Alcoa Inc begins the reporting season by announcing its results after Tuesday’s market close. Alcoa shares fell 1.7% at $9.10.

The Dow Jones industrial average dropped 50.92 points, or 0.38%, to 13,384.29. The Standard & Poor’s 500 Index fell 4.58 points, or 0.31%, to 1,461.89. The Nasdaq Composite Index lost 2.84 points, or 0.09%, to 3,098.81.

Ten mortgage servicers—including Bank of America, Citigroup, JPMorgan, and Wells Fargo—agreed on Monday to pay $8.5 billion to end a case-by-case review of foreclosures required by US regulators.

In a separate case, Bank of America also announced roughly $11.6 billion of settlements with mortgage finance company Fannie Mae and a $1.8 billion sale of collection rights on home loans.

The bank also entered into agreements with Nationstar Mortgage Holdings and Walter Investment Management to sell about $306 billion of residential mortgage servicing rights.

Bank of America shares lost 0.2% at $12.09 while Nationstar Mortgage Holdings jumped 16.8% to $38.83.

Citigroup shares were up 0.09% to $42.47, and Wells Fargo shares fell 0.5% to $34.77.

“The financials probably have the wind behind them now with a lot of the regulations coming out...the market has to absorb a lot of the gains, and for that reason there’s a pullback from this level," said Warren West, principal at Greentree Brokerage Services in Philadelphia.

Shares of US jet maker Boeing Co. dropped 2% after a Boeing 787 Dreamliner aircraft with no passengers on board caught fire at Boston’s Logan International Airport on Monday morning.

Amazon.com shares hit their highest price ever at $269.22 after Morgan Stanley raised is rating on the stock. Shares were up 3.6% at $268.46.

Video-streaming service Netflix Inc shares gained 3.4% to $99.20 after it said it will carry previous seasons of some popular shows produced by Time Warner’s Warner Bros Television.

Walt Disney Co stock fell 2.3% to $50.97. The company started an internal cost-cutting review several weeks ago that may include layoffs at its studio and other units, three people with knowledge of the effort told Reuters.

Volume was lower than average, as 4.78 billion shares were traded on the New York Stock Exchange, NYSE MKT and Nasdaq. This is well below the 2012 average of 6.42 billion per session.

Declining stocks outnumbered advancing ones on the NYSE by 1,629 to 1,363, while on the Nasdaq decliners beat advancers 1,438 to 1,066.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 08 Jan 2013, 08:13 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App