Stocks Close Modestly Lower In Reaction To Earnings News - U.S. Commentary

(RTTNews) - Following the lackluster performance seen in the previous session, stocks saw modest weakness during trading on Friday. Selling pressure was somewhat subdued, however, limiting the downside for the major averages.

The major averages ended the day slightly lower but well off their worst levels. The Dow dipped 31.71 points or 0.2 percent to 21,580.07, the Nasdaq slipped 2.25 points or less than a tenth of a percent to 6,387.75 and the S&P 500 edged down 0.91 points or less than a tenth of a percent to 2,472.54.

For the week, the major averages turned in a mixed performance. The Dow fell by 0.3 percent, while the Nasdaq surged up by 1.2 percent and the S&P 500 climbed by 0.5 percent.

A negative reaction to earnings news from some big-name companies weighed on Wall Street, with shares of General Electric (GE) showing a notable decline.

GE slumped by 2.9 percent after the conglomerate reported better than expected second quarter earnings but warned of full-year profits at the low end of its forecasts.

Shares of Microsoft (MSFT) also moved lower on the day even though the software giant reported fiscal fourth quarter results that exceeded forecasts.

On the other hand, credit card giant Visa (V) posted a strong gain after reporting fiscal third quarter results that beat estimates on both the top and bottom lines.

Shares of Capital One (COF) moved sharply higher after the lender and credit card issuer reported better than expected second quarter results.

Overall trading activity was somewhat subdued, however, with a lack of major U.S. economic data keeping some traders on the sidelines.

Uncertainty about the near-term outlook for the markets also contributed to the choppy trading following the recent move to record highs by the major averages.

Sector News

Most of the major sectors showed only modest moves on the day, although considerable weakness was visible among oil service stocks. Reflecting the weakness in the sector, the Philadelphia Oil Service Index tumbled by 2.3 percent.

The slump by oil service stocks came amid a steep drop by the price of crude oil, with crude for September delivery plunging $1.15 to $45.77 a barrel.

Steel stocks also saw significant weakness, resulting in a 1.3 percent drop by the NYSE Arca Steel Index. The index pulled back further off the four-month closing high set on Wednesday.

Electronic storage, semiconductor, and banking stocks also moved to the downside on the day, while some strength was visible among housing, utilities, and gold stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index slipped by 0.2 percent, while Hong Kong's Hang Seng Index edged down by 0.2 percent.

European stocks also moved mostly lower on the day. While the U.K.'s FTSE 100 Index fell by 0.5 percent, the French CAC 40 Index and the German DAX Index tumbled by 1.6 percent and 1.7 percent, respectively.

In the bond market, treasuries moved to the upside after closing roughly flat for two straight days. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.4 basis points to 2.232 percent.

Looking Ahead

The Federal Reserve is likely to be in focus next week, with the central bank due to announce its latest monetary policy decision next Wednesday.

While the Fed is widely expected to leave interest rates unchanged, traders will pay close attention to the accompanying statement.

Economic data may also attract attention next week, including reports on new and existing home sales, durable goods orders, consumer confidence and second quarter GDP.

Earnings news will also be in the spotlight, as 3M (MMM), DuPont (DD), General Motors (GM), McDonald's (MCD), AT&T (T), Boeing (BA), Coca-Cola (KO), Ford (F), Facebook (FB), Amazon (AMZN), and Exxon Mobil (XOM) are among a slew of companies due to report their results.