US stocks fall after mixed economic data, earnings
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NEW YORK – A report on housing starts is making investors nervous that the economy will be slower to recover even as companies post stronger-than-expected profits.
Stocks are lower Tuesday following a Commerce Department report that home building rose less than expected in September. That’s a discouraging signal for future construction activity.
The housing data are overshadowing strong earnings reports from Apple Inc., Caterpillar Inc., health insurer UnitedHealth Group Inc. and drugmaker Pfizer Inc.The drop comes a day after stocks hit new highs for the year.At midday, the Dow is down 77 at 10,015. The Standard & Poor’s 500 index is down 9 at 1,089, and the Nasdaq composite index is down 16 at 2,161.THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
NEW YORK (AP) — A report on housing starts made investors nervous that the economy will be slower to recover even as companies post profits that exceed expectations.Stocks fell Tuesday after the Commerce Department said home building rose less than expected in September, a discouraging signal for future construction activity.Bond prices jumped after the Labor Department said lower energy prices pushed U.S. wholesale prices lower in September, leaving a larger-than-expected monthly drop in the producer price index. Wall Street economists expected a flat reading. The drop follows a steep rise in August.The disappointing housing data overshadowed strong earnings reports from Apple Inc., Caterpillar Inc., health insurer UnitedHealth Group Inc. and drugmaker Pfizer Inc.Better-than-expected earnings reports from several big companies in the past two weeks including Intel Corp. have bolstered hopes that the economy is recovering. The market reached new highs Monday, with major indexes gaining about 1 percent.Shaeffer’s Investment Research analyst Todd Salamone said the market’s calm reaction to the housing numbers was an encouraging sign."We’ve got a report that’s disappointing and the bears haven’t really gained control here," he said. "It’s a good excuse just to take a breather." In late morning trading, the Dow Jones industrial average fell 33.40, or 0.3 percent, to 10,058.79.The broader Standard & Poor’s 500 index fell 4.10, or 0.4 percent, to 1,093.81, and the Nasdaq composite index fell 6.22, or 0.3 percent, to 2,170.10.
Treasury prices rose, pushing their yields lower, after the drop in producer prices. Inflation is a worry for bond investors because rising prices can eat into returns. The yield on the 10-year Treasury note fell to 3.34 percent from 3.39 percent late Monday.The dollar and gold rose. Crude oil fell 86 cents to $78.75 a barrel on the New York Mercantile Exchange.
Apple reported much stronger profits after the markets closed on Monday, citing big gains in sales of iPhones and Mac computers. Texas Instruments’ results came in above the improved forecast the chip maker issued last month.Apple rose $10.33, or 5.4 percent, to $200.19, while Texas Instruments advanced 32 cents, or 1.4 percent, to $23.84.Caterpillar Inc. rose $2.15, or 3.7 percent, to $60, while UnitedHealth Group jumped $1.39, or 5.6 percent, to $26.31. Pfizer rose 9 cents, or 0.5 percent, to $18.07.Two stocks fell for every one that rose on the New York Stock Exchange, where volume came to 403 million shares compared with 344.1 million shares traded at the same point Monday.
The Russell 2000 index of smaller companies fell 5.42, or 0.9 percent, to 616.92.
Overseas, Japan’s Nikkei stock average rose 1 percent. In afternoon trading, Britain’s FTSE 100 fell 0.3 percent, Germany’s DAX index lost 0.4 percent and France’s CAC-40 fell 0.3 percent.