Stocks opened lower Monday on Wall Street as investors waited for another round of corporate earnings.
The early downturn came after the Dow Jones industrial average rose above 14,000 last week and the benchmark Standard & Poor’s 500-stock index moved within 60 points of its all-time intraday high of 1,576.09.
In early trading Monday, the S.&P. 500 fell 0.6 percent, the Dow was off 0.7 percent and the Nasdaq composite was down 0.6 percent.
“We are coming off an economic data hangover from Friday and the market was on a bullish spree,” said Andre Bakhos, director of market analytics at Lek Securities in New York. “This is an opportunity for investors to take advantage of the bull run.”
The Dow’s march above 14,000 was the highest since October 2007. The S.&P. 500 is up more than 6 percent for the year, with nearly half of the gains coming in the session after Congress successfully sidestepped the so-called fiscal cliff of tax increases and spending cuts that threatened to derail the economic recovery.
“With an early year run of better than 6 percent, investors are already behind in performance and pullbacks should be shallow and well contained, giving the underweighted investors the opportunity to move into equities,” Mr. Bakhos said.
Investors will look to December factory orders data Monday morning for signs of economic improvement. Economists in a Reuters survey expect a rise of 2.2 percent.
Economic data has pointed to a modest United States recovery, but the data has not been strong enough to upset investor expectations the Federal Reserve will continue its stimulus policy that has buoyed stocks.
Earnings are due from a number of companies including Yum! Brands, the owner of fast-food chains.
According to Thomson Reuters data, of the 239 companies in the S.&P. 500 that have reported earnings through Friday, 68 percent have reported earnings above analyst expectations compared with the 62 percent average since 1994 and the 65 percent average over the past four quarters.
S.&P. 500 fourth-quarter earnings are expected to rise 3.8 percent, according to the data. That estimate is above the 1.9 percent forecast at the start of earnings season, but well below the 9.9 percent fourth-quarter earnings forecast on Oct. 1.
European shares were off sharply in afternoon trading as a near-term risk of a technical sell-off and political uncertainty in the euro zone prompted a bout of profit taking with indexes hovering near multiyear highs. The FTSE 100 in London was off 1.2 percent, the DAX in Frankfurt was down 1.4 percent, and the CAC 40 in Paris declined 1.6 percent.
Asian shares climbed to 18-month highs after United States data showed some promise of a credible recovery but not strong enough to threaten the Federal Reserve’s easing plans, while momentum also gained on firmer manufacturing data from Europe and China.
Japan Airlines said it would talk to Boeing about compensation for the grounding of the 787 Dreamliner, adding that the idling of its jets would cost it nearly $8 million from its earnings through to the end of March.
Stocks Open Lower on Wall Street
This article
Stocks Open Lower on Wall Street
can be opened in url
http://newsejection.blogspot.com/2013/02/stocks-open-lower-on-wall-street.html
Stocks Open Lower on Wall Street
