S&P 500 Has Longest Drop Since May Amid Earnings Concern.
U.S. stocks declined for a fourth day, giving the Standard & Poor’s 500 Index its longest losing streak since May, amid concern about corporate profits. Technology and industrial shares, which are forecast to post the strongest second-quarter earnings growth in the S&P 500, slumped amid lower sales estimates at Applied Materials Inc. (AMAT) and Cummins Inc. (CMI) Advanced Micro Devices Inc. (AMD), a maker of processors for personal computers, plunged 11 percent after reporting an unexpected drop in revenue. Commodity shares fell as the euro dropped to a two-year low versus the U.S. dollar.
The S&P 500 decreased 0.8 percent to 1,341.47 at 4 p.m. New York time, dropping 2.4 percent in four days. The Dow Jones Industrial Average retreated 83.17 points, or 0.7 percent, to 12,653.12. Volume for exchange-listed stocks in the U.S. was 6.2 billion shares, 7.4 percent below the three-month average.
“The bigger concern is with the next few quarters,” said Bruce McCain, who helps oversee more than $20 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland. He spoke in a telephone interview. “Earnings disappointments suggest that we’re going to have not only weakness this quarter, but it’s likely to carry on.”
Concern about the outlook for corporate earnings helped the market reverse earlier gains. Profits for S&P 500 companies fell 1.8 percent in the second quarter, according to analyst estimates compiled by Bloomberg. That would be the first decline since 2009, even as revenue is forecast to rise 2.5 percent. Analysts project profit growth of 3.9 percent and 15 percent, respectively, in the third and fourth quarters of 2012.