NEW YORK (AP) — The earnings rally that lifted markets the last two weeks is waning.
The parade of stronger–than–expected quarterly reports slowed Tuesday when several companies reported weak results. That sent broad indexes such as the Standard & Poor’s 500 lower. The Dow Jones industrial average rose modestly.
Pfizer Inc. fared worst in the Dow; it slid 3 percent after the company reduced its revenue forecast for 2011.
Clorox Co. and Molson Coors Brewing Co. each fell about 4 percent after they reported lower net income compared to the same period last year. The consumer goods maker and beverage company both blamed higher costs for raw materials for the decline.
Beazer Homes USA Inc. slipped 5 percent. The homebuilder reported a larger–than–expected loss because orders for new homes fell, reflecting continued weakness in the housing industry.
MetroPCS Communications Inc. rose 9 percent, the most of any company in the S&P 500, after it added a record number of subscribers in the first quarter. The company sells low–cost phone service, primarily in cities.
General Motors (News – Alert) rose 2 percent after its U.S. car and truck sales jumped 26 percent in April. Higher gas prices motivated consumers to buy more fuel–efficient vehicles.
The Dow Jones industrial average rose 21 points, or 0.2 percent, at 12,828in afternoon trading.
The S&P 500 fell 2 points, or 0.2 percent, to 1,359. The Nasdaq composite fell 20, or 0.7 percent, at 2,844.
Randy Bateman, chief investment officer and president of Huntington Asset Advisors, said some kind of weakness was natural following a mostly positive earnings season. About 65 percent of companies in the S&P 500 have reported their results, and earnings are up about 21 percent from the same period last year, according to FactSet (News – Alert).
“We’ve had such a strong, hard run for the entirety of the year in the face of an awful lot of adversity,” Bateman said. “Investors are going to sit back a little bit and say, ‘How much more good news is out there?’”
Bond prices were flat. The yield on the 10–year Treasury note was unchanged at 3.28 percent from late Monday.
The government reported that factory orders rose for the fifth consecutive month in March as businesses ordered more large manufactured goods. That was expected by economists.