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Stocks slump following disappointing earnings

By Steve Rothwell
Associated Press

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NEW YORK: Disappointing earnings from a handful of U.S. companies pushed the stock market on Wednesday to its biggest loss in five weeks.

Health-care stocks had some of the biggest declines. Laboratory Corporation of America slumped after cutting its full-year earnings forecast. Quest Diagnostics, a major competitor, also dropped Wednesday.

Joy Global, a maker of mining equipment, sank after reporting earnings that fell short of Wall Street forecasts.

The broader stock market also fell. The Standard & Poor’s 500 index has fallen six out of eight days in December, leaving it down 1.3 percent for the month.

The market may be succumbing to “buyer’s fatigue” after a big rally this year, said Chris Bertelsen, chief investment officer at Global Financial Private Capital. The S&P 500 has surged 25 percent so far in 2013, putting it on track for its biggest annual increase in a decade.

“Anybody who thinks that it’s up forever is certainly a neophyte to this business,” Bertelsen said.

Another sign that investors’ optimism about stocks may be flagging was a sharp drop in the Russell 2000. The index of small-company stocks fell 1.6 percent Wednesday, the most in a month. Still, this year’s 30-percent gain in the Russell 2000 has outpaced other big indexes.

The S&P 500 index fell 20.40 points, or 1.2 percent, to 1,782.22. It was the biggest decline for the index since Nov. 7.

The Dow Jones industrial average dropped 129.60 points, or 0.8 percent, to 15,843.53. The Nasdaq composite fell 56.68 points, or 1.4 percent, to 4,003.81.

Health-care stocks slid 1.6 percent. Laboratory Corporation of America plunged $10.90, or 11 percent, to $88.25, the biggest decline in the S&P 500. Quest Diagnostics fell $3.40, or 5.8 percent, to $55.20.

Joy Global fell $3.09, or 5.5 percent, to $53.15.

In government bond trading, the yield on the 10-year Treasury note rose to 2.85 percent from 2.80 percent on Tuesday. In commodities trading, the price of oil fell $1.07, or 1.1 percent, to $97.44 a barrel. Gold fell $3.90, or 0.3 percent, to $1,257.20 an ounce.

S&P Dow Jones Indices announced that Facebook will replace Teradyne in the S&P 500 index.

Scripps Networks Interactive jumped $5.75, or 7.6 percent, to $81 after the media company said the board of Discovery Communications discussed a possible bid for it. MasterCard rose $26.96, or 3.5 percent, to $790.57 after announcing a 10-for-1 stock split. The company also raised its dividend and launched a $3.5 billion stock buyback program.


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