NEW YORK: Most stocks fell Friday, dragging the Standard & Poor’s 500 index lower for the week, as earnings from companies including General Electric and Intel disappointed investors.
General Electric lost 2.3 percent as margins at its manufacturing units fell short of projections. Intel dropped 2.6 percent as its revenue forecast raised concern the personal-computer market is struggling to grow. United Parcel Service Inc. slid 0.6 percent as it projected earnings below analysts’ estimates. American Express climbed 3.6 percent after reporting fourth-quarter profit doubled.
The S&P 500 fell 0.4 percent to 1,838.57. The Dow Jones industrial average rose 38.28 points, or 0.2 percent, to 16,455.29 as American Express and Visa Inc. surged. Trading of S&P 500 stocks was 42 percent above the 30-day average, ahead of the expiration of options contracts Friday. Markets will be closed Monday for the Martin Luther King Jr. holiday.
“Investors are taking cues from earnings releases,” said Jim Russell, who helps oversee $113 billion as a senior equity strategist for U.S. Bank Wealth Management. “Just as important as fourth-quarter earnings are, many investors are watching for company guidance for signs on what early 2014 will bring. This year, we’ll see a tearing between winners and losers and we’ve seen that in this earnings season so far.”
On Thursday, Best Buy Co. tumbled after holiday sales declined and earnings at companies from Citigroup Inc. to CSX Corp. disappointed investors. The benchmark gauge is down 0.5 percent this year after jumping 30 percent in 2013 for the biggest annual gain since 1997.
A five-year rally that lifted the S&P 500 up more than 170 percent from a bear-market low has boosted equity valuations to near the highest level since 2009. The S&P 500 trades at 15.6 times the estimated earnings of its members, more than the five-year average multiple of 14.1.
Per-share profit for companies in the S&P 500 benchmark probably climbed 6 percent in the fourth quarter, while sales increased 2 percent, according to analysts surveyed by Bloomberg.
A report on industrial production showed a rise for a fifth month in December while the Thomson Reuters/University of Michigan preliminary January index of consumer sentiment unexpectedly fell. The pace of U.S. home construction dropped less than forecast in December, capping the best year for the industry since 2007.