US stocks decline following disappointing earnings
NEW YORK (AP) — Stocks edged lower in morning trading Wednesday as investors weighed a budget deal out of Washington and several weak earnings reports from U.S. companies.
Laboratory Corporation of America fell the most in the Standard & Poor's 500 index after cutting its full-year earnings forecast. Joy Global, a maker of mining equipment, sank after posting earnings that fell short of the forecasts of Wall Street analysts.
Congress reached a modest U.S. budget agreement that restores about $63 billion in across-the-board automatic spending cuts. The deal comes after lawmakers failed to reach an agreement in October. The gridlock led to parts of the government shutting down for 16 days, crimping economic growth and hurting consumer confidence.
The stock market may be succumbing to "buyer's fatigue" after a strong rally this year, said Chris Bertelsen, chief investment officer at Global Financial Private Capital. The S&P 500 has surged 26 percent this year, putting it on track for its biggest annual increase in a decade.
"Anybody who thinks that it's up forever is certainly a neophyte to this business," said Bertelsen.
The S&P 500 index fell nine points, or 0.5 percent, to 1,793 as of 11:15 a.m. Eastern time. The Dow Jones industrial average dropped 57 points, or 0.4 percent to 15,916. The Nasdaq composite slipped 21 points, or 0.5 percent, to 4,039.
The S&P 500 has fallen six out of eight times in December, leaving it down 1 percent for the month.
Investors are also watching to see when Fed policy makers will reduce their economic stimulus now that the economy appears to be strengthening. The Fed has its next policy meeting on Tuesday and Wednesday of next week.
In government bond trading, the yield on the 10-year Treasury note rose to 2.83 percent from 2.80 percent on Tuesday.
In commodities trading, the price of oil fell 52 cents, or 0.5 percent, to $98 a barrel. Gold fell $4.70, or 0.1 percent, to $1,256.40 an ounce.
Among stocks making big moves, Scripps Networks Interactive jumped $5.42, or 7.2 percent, to $80.69 after the media company said late Tuesday that the board of Discovery Communications discussed a possible bid for it.
MasterCard rose $33.40, or 4.4 percent, to $796.90 after announcing a 10-for-1 stock split. The company also raised its dividend and launched a $3.5 billion stock buyback program.
Laboratory Corporation of America plunged $9.34, or 9.4 percent, to $89.81 and Joy Global dropped $2.19, or 3.8 percent, to $56.34.