Stocks fall as investors await economic reports
Trader Joseph Lawler, and specialist John O'hara, foreground left and right, work on the floor of the New York Stock Exchange Monday, July 28, 2014. Credit: AP / Richard Drew
Stock indexes fell Tuesday, which analysts said was because investors are waiting for economic reports due out later this week.
At the close on Wall Street, the Standard & Poor's 500 index lost 8.96 points, or nearly 0.5 percent, to close at 1,969.95. The Dow Jones industrial average fell 70.48 points, or about 0.4 percent, to 16,912.11, while the Nasdaq composite slipped 2.21 points, less than 0.1 percent, to 4,442.70.
On Wednesday, the government releases its look at economic growth in the spring quarter and the Federal Reserve finishes a two-day meeting. The next day, a report on China's manufacturing industry will give investors an update on the health of the world's factory floor.
The key news comes Friday, when the U.S. Labor Department releases its monthly report on the jobs market.
With traders cautious before these reports, the market has drifted.
"So far, it seems like this week is about waiting for later this week," said Bill Stone, chief investment strategist at PNC Asset Management Group.
Among the heavyweights turning in results Tuesday, Merck reported a large sale and a tax benefit that helped it more than double second-quarter earnings, easily topping Wall Street's expectations. The drugmaker also raised its profit forecast for 2014. Its stock climbed 61 cents, or 1 percent, to $58.58.
A warning of lower profits from United Parcel Service knocked its stock down. UPS said spending on technology to improve its service during the upcoming holiday season will take a cut out of its full-year earnings. The shipping company also said its second-quarter earnings fell 58 percent, though shipments and sales picked up. UPS sank $3.80, or 4 percent, to $98.86.
Even with earnings coming in, traders are mostly biding their time until the economic news hits.
"In the next three days we're going to get so much information on the state of the economy," said Jim Paulsen, chief investment strategist at Wells Capital Management. "It could change the landscape under our feet."
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