Stocks retreat after hitting 15-month high

Network News

X Profile
View More Activity
Sunday, January 17, 2010

U.S. stocks fell last week, pulling the Standard & Poor's 500-stock index down from a 15-month high, as profits at Alcoa and J.P. Morgan Chase disappointed investors.

Shares of Alcoa, the biggest U.S. aluminum producer, fell 8.2 percent, the largest weekly retreat since October, as its fourth-quarter earnings trailed analysts' estimates. J.P. Morgan Chase slumped

2.2 percent after posting a loss in its retail-banking unit. Phone companies in the S&P 500 fell 4 percent as a group, the most among 10 industries, on concern that a new calling plan by Verizon Communications will spur a price war.

"The corporate reports reflect that we have a fragile global recovery," said Stephen Wood of Russell Investments in New York. "The market is digesting the confirmation that this will be a mediocre-but-real, tepid-but-measurable economic recovery."

The S&P 500 fell 0.8 percent, to 1136.03, after climbing to 1150.41 during the Thursday session, the highest level since October 2008, boosted by consumer stocks. The Dow Jones industrial average lost 8.54 points, or 0.1 percent, to 10,609.65.

Alcoa and J.P. Morgan heightened concern that S&P 500 companies will fall short of analysts' estimates calling for a combined 67 percent increase in fourth-quarter earnings. The benchmark index for American equities has rallied

68 percent since March on speculation that interest rates near zero and more than

$8 trillion of government spending and guarantees will end the worst recession since the 1930s.

The Treasury will auction $23 billion of three-month bills and $25 billion of six-month bills Tuesday. The Treasury will sell one-month bills the next day.

-- Bloomberg News


© 2010 The Washington Post Company

Network News

X My Profile
View More Activity