Stocks: Dow in the red for 2015 amid slew of earnings
Stocks took a turn for the worse Thursday afternoon as investors reacted to a torrent of earnings reports and news of the lowest jobless claims in 42 years.
The day started out what seemed like good news when the Labor Department reported that applications for unemployment benefits fell to a 42-year low last week. But while that was good news for the labor market, it also raised concerns that the Federal Reserve could raise interest rates sooner rather than later.
The Dow Jones industrial average ended down 119 points, or 0.7%, to 17,731.95. Of Dow stocks, Caterpillar (CAT), American Express (AXP) and 3M (MMM), led the decliners after reporting earnings results.
The Standard & Poor's 500 index fell 0.6% to 2102.15 and the Nasdaq composite index slid 0.5% to 5146.41.
Investors had plenty of opportunity to see how well companies have been doing because several high-profile companies reported second-quarter results.
Among them:
• McDonald's (MCD) reported earnings and revenue fell in the second-quarter, though the drop was less than expected. The fast-food chain struggled as revenue at U.S. stores fell more than expected. Shares fell 0.5%.
• Shares of General Motors (GM) surged 4% after reporting earnings that beat Wall Street expectations as sales of SUVs and pickups helped offset slowing growth in China.
• Southwest Airlines (LUV) jumped 3.9% after the airline announced its ninth consecutive record of record profits with $691 million in earnings, or $1.03 per diluted share, after excluding special items.
• Caterpillar (CAT) fell more than 3.6% to about $76.88 on news it had net profit of $710 million in the second quarter, down 28% from the same period a year earlier.
European markets initially jumped after Greek lawmakers approved the reforms needed to secure another bailout. The major indexes pared losses later in the day and were trading mixed.
Germany’s DAX index fell 0.1%, France’s CAC 40 was flat, and Britain’s FTSE 100 was down 0.2%.
Asian stock markets were mostly higher. Japan’s Nikkei 225 index rose 0.4% while Hong Kong’s Hang Seng index gained 0.5%. The Shanghai Composite surged 2.4%.
All three major U.S. stock indexes ended lower Wednesday, dragged down after Apple shares fell 4.3% in response to a disappointing sales outlook.