Stocks fall in afternoon trading on mixed earnings
Mixed earnings reports push down US stocks in afternoon trading; Twitter plunges
FILE - In this Friday, May 2, 2014 file photo, trader David O'Day works on the floor of the New York Stock Exchange. U.S. stock futures are trading lower as investors await comments from Federal Reserve Chair Janet Yellen, scheduled to address Congress on the economy. A new report Tuesday, May 6, 2014, shows that housing prices rose in March, but at a slower pace than a month earlier. (AP Photo/Richard Drew, File)
NEW YORK (AP) -- Stocks are falling in afternoon trading Tuesday following mixed earnings from U.S. companies. Technology stocks dropped, led by a plunge in Twitter. Home builder stocks fell broadly after more signs of weakness in the housing market.
KEEPING SCORE: The Standard & Poor's 500 index dropped 15 points, or 0.8 percent, to 1,869 as of 3:12 p.m. Eastern time. The Dow Jones industrial average fell 120 points, or 0.7 percent, to 16,410. The Nasdaq composite dropped 50 points, or 1.2 percent, to 4,087.
TWITTER TUMBLE: The instant messaging service plunged $6.40, or 17 percent, to $32.26 after Twitter insiders were allowed to sell stock for the first time since the company's initial public offering in November. Netflix fell 5 percent, Facebook and Amazon fell 4 percent and Google fell 2 percent.
OFFICE DEPOT UP: The office supply chain soared 73 cents, or 17 percent, to $4.90 after reporting adjusted profits for the first quarter that were twice as high as analysts expected. The company also said it would close at least 400 U.S. stores after its merger with OfficeMax resulted in the overlap of retail locations.
INSURER WOES: American International Group fell $2.21, or nearly 4 percent, to $50.51. The company reported revenue that was below what investors expected due to higher catastrophe losses and lower investment income. Financial stocks fell 1.3 percent, the biggest drop among the ten sectors of the S&P 500.
DISCOVERY DROP: Discovery Communications fell $2.76, or 3.5 percent, to $75.01 after reporting a gain in first-quarter revenue that was lower than analysts expected.
THE QUOTE: "People are getting weary of the 'things-are-getting-better' story," said Steven Ricchiuto, chief economist of Mizuho Securities. "We're hiring more workers, but we're not paying them more ... and so you can only get a certain level of consumer spending, which is three-quarters of GDP."
HOME PRICES: U.S. home prices rose at a slightly slower pace in the 12 months that ended in March, according to data provider CoreLogic. It's another sign that weak sales, caused in part by rising mortgage rates, have begun to restrain the housing market's sharp price gains. Home builder stocks fell broadly. Ryland Group fell $1.18, or 3 percent, to $37.50 and D.R. Horton fell 70 cents, or 3 percent, to $22.28.
ANOTHER BIG PHARMA DEAL: Merck fell $1.50, or nearly 3 percent, to $57.15 after the drug company agreed to sell its non-prescription medicine and consumer-care business to Germany's Bayer for $14.2 billion. Products in that business include Claritin allergy pills, Coppertone sunscreen and Dr. Scholl's footcare products.
MORE EXPORTS: The U.S. trade deficit narrowed in March as exports rose to the second highest level on record. Exports were led by gains in sales of aircraft, autos and farm goods. The deficit declined to $40.4 billion, down 3.6 percent from a revised February imbalance of $41.9 billion, the Commerce Department reported. The February deficit had been the biggest trade gap in five months.
BONDS AND OIL: U.S. government bond prices rose slightly. The yield on the 10-year Treasury note fell to 2.59 percent from 2.61 percent Monday. The yield has fallen from 3 percent at the start of January. The price of oil rose 2 cents to $99.50 a barrel.
