By Wallace Witkowski and Anora Mahmudova, MarketWatch
Qualcomm to buy NXP; CenturyLink in talks to merge with Level
3
U.S. stocks closed lower Thursday, after a session of
fluctuating between slight gains and losses, as a jump in bond
yields prompted a selloff in defensive sectors such as real estate
while investors sifted through mixed earnings results and deal
news.
The S&P 500 index fell 6.39 points, or 0.3%, to close at
2,133.04, with eight of 11 main sectors trading lower. Real-estate
stocks fell 2.5%, while the consumer-discretionary and industrials
sectors finished down nearly 1%. One defensive sector that thrived,
however, was telecom with a 1.6% gain. During the session, the
index had been up by nearly 8 points and down by as many as 7.
"The market is uneven because earnings have been uneven,
investors really are looking at them on a company by company
basis," said Paul Nolte, portfolio manager at Kingsview Asset
Management. "When you roll it all up it doesn't amount to much in
moving the market."
The Dow Jones Industrial Average finished down 29.65 points, or
0.2%, at 18,169.68, with Boeing Co.(BA) shares falling 1.5%, and
Verizon Communications Inc. (VZ) shares gaining 1.9%. The average
has been up as many as 59 points and down by as many as 50.
The Nasdaq Composite fell 34.29 points, or 0.6%, to close at
5,215.97. On the session, the index had been up by as many as 24
points and finished near its intraday low.
A jump in Treasury yields placed pressure on stocks Thursday,
said Michael Antonelli, equity sales trader at Robert W. Baird
& Co.
Bond Report:Global bond rout sends 10-year U.S. yield to highest
level since June
(http://www.marketwatch.com/story/10-year-treasury-yield-holds-near-5-month-high-after-data-2016-10-27)
"Bonds in general have been a crowded long trade and now that
the outlook for the U.K. economy after better-than-expected GDP has
shifted, there is an unwinding of these trades," said
Antonelli.
The yield on the 10-year Treasurys rose 5 basis points to 1.84%
on Thursday.
Kingsview's Nolte said the uptick in interest rates was
instrumental in pressuring those sectors sensitive to them with
utilities and real estate leading the decliners.
Antonelli also noted that investors are waiting for the outcome
of the presidential election on Nov 8.
"We are unlikely to see anything other than sideways trade until
after the elections," Antonelli said.
Stocks have struggled this week, and are set to log losses for
October. "A mixed earnings season in the U.S. makes a rally to
higher ground difficult to justify," said Lee Wild, head of equity
strategy at Interactive Investor, in a note to clients.
"There just isn't the consistency right now, and a U.S. election
less than two weeks away lessens conviction among investors," added
Wild.
Mark Kepner, managing director of sales and trading at Themis
Trading, said that earnings reports have helped markets from
falling during the period that is usually volatile. "Earnings have
been not been spectacular to be a catalyst for markets to go
higher, but they definitely helped markets stay close to all-time
highs," Kepner said.
Data: The number of people who applied for first-time
unemployment benefits
(http://www.marketwatch.com/story/jobless-claims-drop-3000-to-258000-2016-10-27)last
week fell by 3,000 to 258,000, extending a period of extremely low
layoffs last seen in the early 1970s.
Orders for long-lasting goods
(http://www.marketwatch.com/story/durable-goods-orders-soften-in-september-2016-10-27)made
in the U.S. fell slightly in September, largely because of lower
demand for military hardware and computers.
A gauge of pending home sales rose
(http://www.marketwatch.com/story/pending-home-sales-leap-as-demand-bolsters-housing-market-2016-10-27)1.5%
in September, reversing an August decline.
Movers:NXP Semiconductors N.V.(NXPI) shares rose 0.4% after the
chip maker said it's in a deal to be acquired by
(http://www.marketwatch.com/story/nxp-semis-stock-surges-after-47-billion-buyout-deal-with-qualcomm-2016-10-27)Qualcomm
Inc
(http://www.marketwatch.com/story/nxp-semis-stock-surges-after-47-billion-buyout-deal-with-qualcomm-2016-10-27).(QCOM)
that would value NXP at about $38 billion. Qualcomm shares closed
up 2.8%.
Shares of Twitter(TWTR) rose 0.6% after the social-media company
reported profit and sales that beat expectations
(http://www.marketwatch.com/story/twitters-stock-surges-after-profit-and-sales-beat-expectations-2016-10-27),
and announced it would lay off 9% of its workforce and discontinue
its Vine video service.
CenturyLink Inc.(CTL) shares closed up 9.7% following a report
(http://www.marketwatch.com/story/centurylink-in-advanced-merger-talks-with-level-3-communications-2016-10-27)of
advanced talks to merge with Level 3 Communications Inc.(LVLT)
Level 3 shares rallied 11%.
Ford Motor Co.(F) shares finished down 1.2% after the auto
maker's third-quarter profit dropped 56%
(http://www.marketwatch.com/story/ford-profit-hurt-by-recall-costs-2016-10-27).
Per-share operating profit of 26 cents a share, however, were ahead
of expectations.
Tesla Motors Inc.(TSLA) shares rose 0.9% after the electric-car
maker late Wednesday delivered a surprise profit
(http://blogs.marketwatch.com/thetell/2016/10/26/tesla-earnings-expected-to-show-loss-despite-elon-musks-plea-live-blog/)
and better-than-expected revenue.
ConocoPhillips(COP) issued an upbeat full-year outlook
(http://www.marketwatch.com/story/conocophillips-shares-rise-after-upbeat-full-year-outlook-2016-10-27)
as its quarterly adjusted loss of 66 cents a share was narrower
than the anticipated 68 cents a share. Shares finished up 5.3%.
Colgate-Palmolive Co.(CL) posted third-quarter sales that missed
the consensus view
(http://www.marketwatch.com/story/colgate-palmolive-shares-fall-after-sales-miss-2016-10-27).
Shares fell 1%.
Celgene Corp.(CELG) shares rose 6.4% after the company boosted
its outlook
(http://www.marketwatch.com/story/celgene-tops-estimates-and-raises-outlook-2016-10-27)
for the year and reported results that easily topped expectations
in the latest quarter.
Gannett Co.(GCI) shares closed down 17% after the newspaper
company reported a wider-than-expected loss for the quarter
(http://www.marketwatch.com/story/gannett-misses-profit-expectations-but-sales-beat-2016-10-27).
Bristol-Myers Squibb Co.(BMY) shares rallied 5.4% after the
drugmaker lifted its outlook
(http://www.marketwatch.com/story/bristol-myers-squibb-planning-revamp-2016-10-27)
after better-than-expected earnings and announced an organizational
revamp.
F5 Networks Inc.(FFIV) shares jumped 9.6% after Goldman Sachs
and Piper Jaffray both raised their price targets on the stock.
Alexion Pharmaceuticals Inc.(ALXN) shares closed up 8% after the
company raised its outlook
(http://www.marketwatch.com/story/alexion-pharma-raises-revenue-outlook-2016-10-27).
Teradata Corp.(TDC) shares slumped 7.6% after the company's
quarterly revenue and outlook fell short of Wall Street
estimates.
L-3 Communications Holdings Inc.(LLL) shares fell 8.1% as sales
for the quarter declined
(http://www.marketwatch.com/story/l-3-sales-decline-but-forecasts-get-a-boost-2016-10-27-8485262).
Read: Riding high on profit, Tesla's Elon Musk promises much,
trash-talks nearly everyone
(http://www.marketwatch.com/story/riding-high-on-profit-teslas-elon-musk-promises-much-trash-talks-nearly-everyone-2016-10-26)
Other markets:Asian markets
(http://www.marketwatch.com/story/weak-china-economic-data-help-push-asian-markets-down-2016-10-26)
had a mostly weaker session, weighed somewhat by weak Chinese
industrial profits. In Europe, stocks traded mixed as investors
absorbed earnings from Deutsche Bank AG(DBK.XE) (DBK.XE), which
reported a surprise profit
(http://www.marketwatch.com/story/deutsche-bank-swings-to-profit-2016-10-27-1485425).
The dollar
(http://www.marketwatch.com/story/yen-boosted-against-dollar-on-weakness-in-japanese-stocks-2016-10-27)
rose slightly higher against rivals, while gold
(http://www.marketwatch.com/story/gold-gains-as-strong-dollar-cools-its-advance-2016-10-27)
rose 0.2% to settle at $1,269.50 an ounce. Oil prices
(http://www.marketwatch.com/story/oil-prices-steady-as-markets-ignore-us-supply-data-focus-on-opec-2016-10-27)
settled 1.1% higher at $49.72 a barrel after upbeat U.S. supply
data.
-- Carla Mozée in London and Barbara Kollmeyer in Madrid
contributed to this report.
(END) Dow Jones Newswires
October 27, 2016 16:23 ET (20:23 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.