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Wall Street Slips On Tech Warnings; P&G Cuts Dow’s Loss
Caroline Valetkevitch, Reuters - U.S. stocks fell on Thursday, hit by more warnings in the technology sector, while a rally in Procter & Gamble (PG.N) helped the blue-chip Dow cut its loss.
Shares of consumer products giant Procter & Gamble (PG.N) rose 3.7 percent to $63.70 after a source said activist investor William Ackman appears to be building a stake in the U.S. household products company. [ID:nL2E8IC7Z] Despite the support, the Dow ended lower for a sixth day.
Tech shares remained under pressure, with the S&P technology sector index down 3.5 percent for the month so far. Indian IT heavyweight Infosys Ltd (INFY.NS)(INFY.O) became the latest big tech company to warn of sluggish sales, saying global economic uncertainty was hitting technology spending.
U.S.-listed shares of Infosys slid 11.2 percent to $38.75, after earlier dropping to an all-time low of $38.12.
“I think it is the fear that technology companies are going to miss estimates” this earnings period, said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.
Profit warnings from companies such as Advanced Micro Devices Inc (AMD.N) have hurt the sector in recent days. The S&P tech sector index .GSPT ended Thursday down 1.1 percent.
All three major U.S. stock indexes recovered from their lows of the day, with the S&P 500 bouncing off its 50-day moving average at 1,334 and the Dow briefly trading higher after hitting technical support at 12,500, analysts said.
Merck & Co. (MRK.N) shares also bolstered the Dow. Merck’s stock rose 4.1 percent to $42.91 after a pivotal trial of Merck’s experimental osteoporosis drug odanacatib has shown that it reduces the risk of fracture.
The Dow Jones industrial average .DJI shed 31.26 points, or 0.25 percent, to 12,573.27 at the close. The Standard & Poor’s 500 Index .SPX shed 6.69 points, or 0.50 percent, to 1,334.76. The Nasdaq Composite Index .IXIC lost 21.79 points, or 0.75 percent, to close at 2,866.19.
Overall market sentiment was weak, especially after the lack of any monetary easing by the Bank of Japan on Thursday, and few clues on Wednesday in the minutes from the Federal Reserve’s June policy meeting. The lack of policy moves suggested major central banks were still cautious about the need for further easing.
On the earnings front, Bank of America Merrill Lynch Global Research lowered its forecast on the S&P 500′s 2012 earnings per share to $102 from $103.50, and for 2013, to $109 from $110.50.
The forecasts were cut “to reflect the impact of lower commodity prices and slower global growth on corporate profits,” BofA Merrill Lynch Global Research analysts said in a note.
Read the rest of the story at Reuters here.
The Common Good publishes a financial market wrap-up every weekday after markets close.