By Dan Strumpf and Saumya Vaishampayan
The Dow Jones Industrial Average slipped Thursday following
disappointing earnings reports from a handful of big U.S.
companies.
The Dow shed 14 points, or 0.1%, to 17837. The S&P 500 index
added a point, or 0.1%, to 2115. The Nasdaq Composite Index rallied
22 points, or 0.4%, to 5194.
Investors were disappointed with the quarterly results from Dow
components American Express Co., 3M Co. and Caterpillar Inc., even
as many companies continued to surpass the muted expectations of
the second-quarter earnings season. Including results from 125
companies in the S&P 500, earnings are on track to fall 2.7%,
according to FactSet, better than the 4.5% decline initially
expected by analysts.
Shares of American Express shed 2.8%, posting the biggest loss
in the Dow after the credit-card company's second-quarter earnings
fell 3.7%.
3M shares declined 2.5% after the manufacturing giant lowered
its 2015 earnings guidance, though second-quarter profits rose.
Caterpillar shares declined 2.5% after the heavy equipment maker
reported a steeper-than-expected 13% drop in quarterly sales
"You end up with a little bit of a mixed earnings picture," said
Brian Levitt, senior investment strategist at OppenheimerFunds.
"There are some companies that are still dealing with the headwinds
of what have been a very strong dollar and what is becoming a
stronger dollar."
Outside of the 30-company Dow, results were more upbeat. General
Motors Co. said second-quarter profit rose sharply as U.S.
customers continued to flock to profitable SUVs and crossover
vehicles. Shares rose 5.8%.
A stream of better-than-expected corporate profits have helped
to buoy stocks in recent weeks. The abating crisis over Greece's
future in the eurozone has also helped calm investor nerves. So far
in July, the S&P 500 has gained 2.5%, while the Dow is up 1.3%.
The Nasdaq has rallied 4.2%, boosted by a rise in several
high-profile technology stocks.
"With the overall macro situation a bit more calm in Greece and
China, the market is digesting what's been better-than-expected
corporate earnings for the most part in the U.S.," said Steven
Rees, global head of equity strategy at J.P. Morgan Private
Bank.
Another sign of the strengthening labor market was visible
Thursday, when data showed jobless claims fell to a four-decade
low. Claims fell by 26,000 to 255,000 in the week ended July 18,
the lowest level since 1973. Economists surveyed by The Wall Street
Journal had expected 278,000 new claims.
France's CAC-40 gained 0.2%, while Germany's DAX rose 0.1%. An
early-morning vote in Greece's Parliament approved a second batch
of economic overhauls demanded by creditors, paving the way for
bailout talks.
The slump in commodities prices showed signs of abating. Gold
futures added 0.3% to $1094.50 an ounce. Crude-oil futures rose
0.6% to $49.49 a barrel.
In other earnings news, Comcast Corp. said its second-quarter
profit rose 7.3%, boosted by the movie "Jurassic World" and revenue
growth at its broadband and business services divisions. Still,
shares lost 2%.
Qualcomm Corp. said late Wednesday it would cut spending by $1.4
billion and consider restructuring its operations, as the company
disclosed a 47% drop in quarterly profit. Shares fell 3.5%.
Also after the bell on Wednesday, SanDisk Corp. reported steep
drops in profit and revenue for its second quarter. Results came in
above Wall Street expectations and shares soared 18%.
The yield on the 10-year Treasury note rose slightly to 2.330%
as prices fell.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com and
Dan Strumpf at daniel.strumpf@wsj.com
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