Wednesday, October 17, 2012

Why Wall Street Stock down october 17 2012

Why Wall Street Stock down october 17 2012 : Shares on Wall Street were off on Wednesday despite a report indicating that housing starts rose last month at the fastest pace in more than four years.

Shortly after the opening bell, the Standard & Poor’s 500-stock index was flat, while the Dow Jones industrial average was down about 0.3 percent and the Nasdaq composite was off 0.4 percent.

Shares of Bank of America, the second-largest American bank by assets after JPMorgan Chase, was 1.5 percent lower after it reported break-even results that exceeded estimates.

This week, Citigroup and Goldman Sachs had indicated improvement in the financial sector by posting strong results, but JPMorgan and Wells Fargo disappointed investors.

Intel and I.B.M. reported disappointing quarterly results on Tuesday, sending their stocks sharply lower in opening trading on Wednesday.

“There was a lot of pessimism going into earnings season, but over all I’m happy with what I’m seeing,” said Scott B. Schermerhorn, chief investment officer at Granite Investment Advisors in Concord, N.H. “Things seem to be improving for banks.”

He added: “I.B.M. and Intel were weak, but it isn’t surprising to see such globally exposed companies hit by weakness in Europe and emerging markets.”

Toll Brothers, the homebuilder, rose 0.6 percent on Wednesday as a result of the news on housing starts, while D.R. Horton gained 2.5 percent.

Equities are coming off their best two-day advance in a month, a rise of 1.8 percent. Those gains came as some disappointments early in the earnings season were offset by strong results from bellwethers like Johnson & Johnson.

Still, the first reports from companies in the technology sector, which is closely monitored for what it reveals about business spending, suggested reasons for caution.

Earnings for companies in the S.&P. 500 are expected to fall 2.3 percent from the quarterly reports of a year earlier, with the main culprit being the slowing global economy. But the latest forecast does signal a slight improvement from estimates last week, according to Thomson Reuters data.

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