New York: Most US stocks declined after consumer confidence and home sales trailed forecasts, reviving concern that the economy is slowing. An expanded share repurchase by International Business Machines Corp. lifted the Dow Jones Industrial Average to its eighth gain in nine days.
AT&T Inc. led telephone companies to the steepest retreat in the Standard & Poor’s 500 Index after subscribers rose less than analysts expected. Retailers declined after Target Corp., the nation’s second-largest discount chain, cut its April sales growth projection.
Seven stocks fell for every five that gained on the New York Stock Exchange after Americans’ confidence slumped to the lowest in eight months, sapped by concerns about increasing fuel costs and a wave of mortgage defaults. Sales of previously owned homes in the US dropped in March to the lowest in almost four years, delaying an improvement in housing.
Rs.The recovery is over. Now it’s just a question of how far and how fast the economy will slow down,’’ said Richard Weiss, who manages about $50 billion as chief investment officer at City National Bank in Beverly Hills, California. Rs.We don’t expect much out of equities this year.’
The S&P 500 slipped 0.52 to 1480.41. The Dow average added 34.54, or 0.3 %, to 12,953.94. The Nasdaq Composite Index advanced 0.87 to 2524.54.
Benchmark indexes fell yesterday after crude oil rose and concern mounted that home loan defaults will accelerate, overshadowing the biggest day for takeovers since 2000.
Some 1.64 billion shares changed hands on the Big Board today, 3 % more than the three-month daily average.
AT&T lost 67 cents to $39.10. While the biggest US mobile phone service provider said profit almost doubled last quarter, its addition of 1.2 million subscribers fell short of some estimates. UBS AG analyst John Hodulik expected 1.5 million.
A measure of telephone stocks in the S&P 500 declined 0.7 % for the worst performance among 10 industries.
Target slumped $1.10 to $60.33 after saying cold weather kept shoppers away this month. Sales at stores open at least a year for March and April combined will rise as much as 4 %, less than its projection of a 4 % to 6 % gain, the company said.
Industrywide, sales at stores open at least a year declined by 0.3 % in the seven days through 21 April from the previous week, according to the International Council of Shopping Centers and UBS Securities LLC. Sales for all of April may be unchanged from 2006, the ICSC and UBS said.
Wal-Mart Stores Inc., which this month said April sales may be unchanged or decline, slipped 24 cents to $48.69. Gap Inc., the nation’s biggest clothing retailer, fell 17 cents to $18.74. Retailers in the S&P 500 dropped 0.6 % as a group.
Reports today showing slower housing resales and deteriorating consumer confidence may signal the economy, which is projected to have grown last quarter at the weakest pace in more than a year, won’t accelerate in coming months.
Existing home sales slid 8.4 % in March to an annual rate of 6.12 million, the National Association of Realtors said. A separate private report showed home-price declines in 20 major cities accelerated in February. The Conference Board’s consumer confidence index fell to 104 from 108.2.
Treasuries gained, pushing the benchmark 10-year note’s yield to a three-week low and the dollar dropped to within a half-cent of a record low against the euro. Crude oil retreated in New York.
IBM, Texas Instruments
Gains in IBM and Texas Instruments Inc. pushed computer-related shares in the S&P 500 up 0.8 %, the top performance among 10 industries.
IBM, the world’s largest computer-services company, gained $3.28 to $98.49. Its 3.5 % advance was the steepest in the Dow average and the most since October 2004. IBM boosted its share-buyback program by $15 billion and raised its quarterly dividend by 33 % to 40 cents.
Texas Instruments jumped $2.51, or 7.7 %, to $34.92 for its best advance since March 2006. The world’s largest maker of mobile-phone chips forecast earnings that exceeded analysts’ estimates after saying it recovered from an inventory glut and daily sales Rs.increased significantly’ in March from February across a wide range of products.
Second-quarter profit, excluding some costs, will be as much as 45 cents a share. Analysts expected 38 cents, the average of estimates compiled by Bloomberg.
Rs.Business in general, here and around the world, is strong enough to provide more demand for technology,’ said Richard Sichel, who helps oversees $1.5 billion as chief investment officer of Philadelphia Trust Co. in Philadelphia. Rs.Tech could become more of a standout.’
Among other companies that reported earnings, Whirlpool Corp. said first-quarter profit from continuing operations was $1.55 a share. Analysts expected $1.13, on average. Shares of the world’s largest appliance maker surged $12.50 to $102.85. Its 14 % gain was the biggest since September 1997.
DuPont Co. added 67 cents to $49.86. The No. 3 US chemical maker said first-quarter profit climbed 16 % after soaring demand for ethanol in the US spurred sales of corn seed.
Express Scripts Inc. jumped $8.08 to a record $96.98 after profit topped analysts’ estimates and the company raised its forecast. The third-largest US manager of drug benefits got a boost from sales of generic versions of drugs such as Pfizer Inc.’s antidepressant Zoloft and Merck & Co.’s cholesterol pill Zocor.
Paccar Inc. climbed $7.77, or 9.9 %, to $86.56 for the biggest surge since March 2000. The No. 3 truckmaker said first-quarter profit climbed 7 % on growth in Europe, beating analysts’ estimates.
Better-than-expected earnings spurred analysts last week to boost first-quarter profit growth estimates at S&P 500 companies to 6.2 % from 3.1 %, Bloomberg data show.
Rs.This economic expansion is very much intact,’’ said Keith Wirtz, who manages $23 billion as chief investment officer of Fifth Third Asset Management in Cincinnati. Rs.We’ll get better- than-average stock market returns this year.’
Wirtz expects the S&P 500 to surpass 1600, climbing above the March 2000 record high of 1527.46 this year.
Juniper Networks Drops
Juniper Networks Inc. dropped 24 cents to $20.87. The world’s second-biggest maker of equipment for directing Internet traffic said first-quarter profit fell 12 % as the company boosted research spending to compete with Cisco Systems Inc. Piper Jaffray & Co. cut Juniper to Rs.market perform’ from Rs.outperform.’
The Russell 2000 Index, a benchmark for companies with a median market value of $681.2 million, lost 0.1 % to 826.36. The Dow Jones Wilshire 5000 Index, the broadest measure of US shares, retreated 0.1 % to 14,972.49. Based on its decline, the value of stocks decreased by $14.2 billion.