U.S. stocks slid Friday after some earnings reports from big-name companies fell short of expectations.
NEW YORK (AP) — A batch of mixed earnings reports Friday helped push the stock market to its first day of losses this week.
Shares of tissue and diaper maker Kimberly-Clark dropped after the company’s earnings fell short of expectations and it gave a disappointing outlook. Package-delivery service UPS plunged after it cut its earnings forecast.
Strong growth in company earnings have underpinned a bull run in stocks that has stretched for nearly six years. Earnings are still expected to keep rising, but the pace of growth is slowing, and investors are looking for signs that sales are up.
“Our view is that the market is poised to have a reset to reflect what we think is a lower growth environment,” said James Abate, chief investment officer of Centre Funds, an asset management company.
The Standard & Poor’s 500 index fell 11.33 points, or 0.6 percent, to 2,051.82. The Dow Jones industrial average slipped 141.38 points, or 0.8 percent, to 17,672.60. The Nasdaq composite bucked the trend, gaining 7.48 points, or 0.2 percent, to 4,757.88.
Despite the fall, stocks ended with their first weekly gain of the year.
Global stocks rose sharply on Thursday after the European Central Bank announced that it would buy 60 billion euros ($67 billion) of government and corporate bonds each month at least through September 2016. The 1.1 trillion euro program signals the willingness of the ECB to boost the economies in the 19-nation euro currency alliance.
The ECB’s stimulus “was a big positive not just for Europe, but also the U.S.,” said Jerry Braakman, chief investment officer of First American Trust, in Santa Ana, California.
Stocks have wavered since the start of the year on signs that growth outside of the U.S. was slowing. Many investors worried that a pronounced slowdown would eventually curb the U.S. economic recovery.
“Anything that can stem the contagion and stop the malaise from spilling over … that allows our bull market to continue,” Braakman said.
For the week, the S&P 500 edged up 1.6 percent while he Dow rose 0.9 percent.
But on Friday, earnings from some big-name companies weighed down the market.
Kimberly-Clark reported a fourth-quarter loss of $83 million. The company also forecast weaker sales in 2015. The stock dropped $7.33, or 6.2 percent, to $111.65.
UPS said it was hurt by the huge cost of guaranteeing punctual deliveries over the holidays. That forced the shipping company to cut its outlook for the year. UPS hired more workers and boosted capacity at its facilities during the busy holiday season to avoid a repeat of 2013, when shippers struggled with a deluge of orders. Its stock slumped $11.32, or 10 percent, to $102.93.
Oil has resumed its slump after stabilizing last week. Benchmark crude finished down 72 cents to $45.59 a barrel on Friday. For the week, oil is also down, extending a slump that has cut the price by more than half since June.
As a result of oil’s fall, weaker results from energy companies are expected to hurt profits for S&P 500 companies in the fourth quarter. But overall earnings are expected to grow by 4.1 percent in that period, according to data from S&P Capital IQ. That’s slower than the 4.9 percent increase a year earlier. Revenue is expected to rise grow 2 percent.
Still, not all earnings reports on Friday disappointed.
Starbucks quarterly earnings soared 82 percent as the coffee chain attracted more customers over the holidays, thanks to its expanded food and drink menu. The company’s stock jumped $5.48, or 6.6 percent, to $88.22.
In government bond trading, prices rose. The yield on the 10-year government bond fell to 1.79 percent from 1.87 on Thursday.
The dollar continued to strengthen against most major currencies. Against the euro, the dollar traded at $1.1212 from $1.356. The euro is at its lowest against the dollar in more than a decade.
The U.S. currency slipped slightly against the Japanese yen, dropping to 117.83 yen from 118.56 yen the previous day.
In metals trading, prices fell.
Silver dropped 6 cents, or 0.3 percent, to $18.30 an ounce. Gold fell $8.10, or 0.6 percent, to $1,292.60 an ounce. Copper declined 7.7 cents, or 3 percent, to $2.50 a pound.