By Kate Gibson
U.S. stocks finished lower on Thursday, with disappointing
corporate results and a Fed official's warning on deflation sapping
some of the optimism drawn from earnings season and the market's
strong gains in July.
Investors also hesitated to take a decisive stance before the
government releases its first take on U.S. second-quarter economic
growth on Friday.
"There is a shuffling of positions prior to tomorrow's [gross
domestic product] number, with investors getting positions in line
and taking some risk off the table," Dan Cook, senior market
analyst at IG Markets, said of the session's seesawing trade.
After snapping a four-day win streak Wednesday, the Dow Jones
Industrial Average (DJI) fell 30.72 points, or 0.3%, to end at
10,467.16, though that was well off an earlier low of 10,387.
The Dow still remains up 7% for July so far, with one trading
session left in the month.
Kraft Foods (KFT) and Procter & Gamble (PG) fell the most
among Dow components, hit by disappointing results from consumer
companies.
Colgate (CL) reported second-quarter sales that fell below
analysts estimates and cut its 2010 profit view because of currency
devaluation in Venezuela.
Shares of Dow component Exxon Mobil Corp. (XOM) also finished
lower, even after the oil giant reported a near-doubling of
second-quarter income. .
"The markets are becoming more cautious again as we get to the
upper trading range on a great earnings season," said Bruce McCain,
chief investment strategist at Key Private Bank.
U.S. economic data remain soft, and while the morning's
better-than-expected drop in weekly jobless claims was positive,
the labor market remains "sluggish," said Peter Boockvar, equity
strategist at Miller Tabak.
"We're still adding jobs, but not to the point that we should be
at this point in the recovery," Boockvar said.
The market also fretted ahead of the government's reading on
quarterly economic growth, due Friday morning. Analysts expect U.S.
GDP slowed in the second quarter to an annual rate of 2.5% from
2.7% in the first.
The S&P 500 Index (SPX) dropped 4.60 points, or 0.4%, to
2,251.69. The utilities and consumer staples sectors weighed the
most on the broad index, losing 1.6% and 1.1% respectively, while
financials rose the most.
Ameriprise Financial Inc. (AMP) rallied 12%. Late Wednesday, the
investment manager reported a near-tripling of profit in the second
quarter.
Among the S&P 500's more noteworthy movers, shares of Citrix
Systems Inc. (CTXS) surged nearly 20% after the provider of
software and equipment for computer business systems late Wednesday
projected a stronger-than-expected quarter and year. .
On the downside, Akamai Technologies Inc. (AKAM) shares fell
nearly 13% after the provider of services to online entertainment
companies offered a disappointing outlook. Akamai shares had
climbed more than 30% in the past three months on the belief that
it would profit from demand for online media.
The Nasdaq Composite Index (RIXF) shed 12.87 points to
2,251.69.
Advancers edged past decliners by an 8-7 ratio on the New York
Stock Exchange, where nearly 1.2 billion shares traded.
Federal Reserve Bank of St. Louis President James Bullard warned
against a Japanese-style deflationary trap stemming from the
central bank's extended period of low interest rates in a paper
released Thursday. .
Ahead of Wall Street's start, stock futures added slightly to
their earnings-inspired rise after the government said initial
claims for unemployment benefits fell modestly, with the count
slightly better than analysts had projected. .