Stocks decline on earnings; Coca-Cola drops

Published on NewsOK Modified: July 16, 2013 at 3:43 pm •  Published: July 16, 2013
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NEW YORK (AP) — A string of lackluster earnings reports from companies including Coca-Cola and Charles Schwab ended an eight-day winning streak for the Standard & Poor's 500 index.

Coca-Cola, the world's largest beverage maker, fell after the company said it sold less soda in its home market of North America. Retail brokerage Charles Schwab's second-quarter earnings fell short of what analysts were expecting. Marathon Petroleum fell after the fuel refiner forecast weak earnings and said its business was being hurt by renewable fuels laws.

"The expectations out there for earnings overall, they're pretty modest," said Scott Wren, senior equity strategist at Wells Fargo. "Earnings season is not going to be what drives the market from here."

The Dow Jones industrial average fell 32.41 points, 0.2 percent, to 15,451.85. The Standard & Poor's 500 index declined 6.24 points, or 0.4 percent, to 1,676.26. The Nasdaq composite dropped 8.99 points, or 0.3 percent, to 3,598.50.

Eight of the 10 industry groups in the S&P 500 fell. The declines were led by materials companies. Phone companies and technology companies were the two groups that gained.

Coke dropped 78 cents, or 1.9 percent, to $40.23 after the company reported that its second-quarter profit fell 4 percent. Charles Schwab fell 71 cents, or 3.3 percent, to $21 after its earnings came in short of analysts' expectations as expenses rose and its interest margins fell. Marathon Petroleum fell $3.17, or 4.3 percent, to $69.93.

"Expectations for earnings growth this quarter are fairly subdued," said Michael Sheldon, chief market strategist for RDM Financial Group. "However, the important thing for investors is to look ahead to the second half of the year, where earnings are supposed to pick up significantly."

Overall S&P 500 earnings are expected to grow by 3.4 percent in the second quarter from the same period a year ago, according to data from S&P Capital IQ. The rate of earnings growth is predicted to rise in the third and fourth quarters, reaching 11.6 percent in the final three months of the year.

The stock market has climbed back to record levels following a brief slump in June, when the S&P 500 logged its first monthly decline since October on concern that the Federal Reserve would ease back on its economic stimulus too quickly. The S&P 500 gained for eight straight trading sessions through Monday, its longest winning streak since January. Had the index ended higher Tuesday, it would have marked the longest series of advances since 2004.

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