Wall Street Stocks Lower on Earnings Disappointments

Nichole Harper
16 Jan, 2014
New York City

U.S. market indexes drifted lower after weaker than expected earnings from Citigroup, Goldman Sachs and United Health. Best Buy Co plunged nearly one third after sales lagged in holiday period. Weekly jobless claims declined 2,000 last week.

[R]12:25 PM New York – U.S. market indexes drifted lower after weaker than expected earnings from Citigroup, Goldman Sachs and United Health. Best Buy Co plunged nearly one third after sales lagged in holiday period. Weekly jobless claims declined 2,000 last week.[/R]

Earnings dominated Wall Street trading and market indexes were on the defensive after weaker than expected results from Goldman Sachs, Citigroup and United Health.

Best Buy Co., Inc plunged as much as 31% after recovering to a loss of 28% after the retailer reported a decline in total sales during holiday period on larger discounts and tougher competition from Internet based retailers.

J.C. Penney, the troubled department store operator dropped 4.7% after the company announced its plan to close 33 stores and layoff 2,000 staff.

S&P 500 index decreased 0.2% or 3.74 to 1,844.64 and the Nasdaq Composite Index eased 1.47 to 4,213.42.

Weekly Jobless Claims Decline

Weekly jobless claims declined 2,000 to 326,000 in the last week, Department of Labor reported today.

The less volatile 4-week average of claims declined 13,500 from the previous week to 335,000.

The weekly claims had spiked as high as 670,000 in March 2009 and since then steadily declined to the level before December 2007.

The U.S. economy has been recovering but the economic expansion has been spotty and uneven. The GDP growth has bounced between 2% and 3% and employers have been slow in adding staff.

Last week, Department of Labor reported employers at all levels added only 74,000 jobs.

European Markets

In London trading, FTSE 100 index fell 0.1% or 3.6 to 6,816 and in Frankfurt the DAX index slid 0.1% or 13.1 to 9,721.

In Paris, CAC 40 index fell 0.3% or 15.01 to 4,317.

U.S. Stocks in Review

BlackRock, Inc ((BLK)) gained $2.80 to $315.55 after the investment manager said revenue in the fourth-quarter ending in December jumped 9% to $2.78 billion.

Net income in the quarter surged 24% to $841 million or $4.86 a diluted share compared to $690 million or $3.93.

BB&T Corporation ((BBT)) fell 1.4% or 55 cents to $38.23 after the financial service provider reported net sales in the fourth-quarter ending in December slipped 6% to $2.38 billion.

Net income in the quarter advanced 6.1% to $537 million or 75 cents a diluted share compared to $506 million or 71 cents.

Best Buy Co., Inc ((BBY)) tumbled 27.5% or $10.34 to $27.23 after the consumer electronics retailer said total revenue in the nine-week period ending on January 4 dropped 2.6% to $11.45 billion from $11.75 billion.

Comparable store sales in the United States for the period fell 0.9% and rose 0.1% internationally.

Domestic revenue declined 1.5% to $9.75 billion and online revenue reached $1.32 billion and comparable online sales increased 23.5%. International revenue plunged 8% to $1.70 billion.

Citigroup Inc. ((C)) declined 4.1% or $2.24 to $52.75 after the financial service provider stated total revenues in the fourth-quarter ending in December slid 1% to $17.8 billion.

Net income in the quarter plunged 17% to $2.69 billion or 85 cents a diluted share compared to $1.20 billion or 38 cents.

The Goldman Sachs Group, Inc ((GS)) dropped 2.1% or $3.79 to $174.92 after financial broker and investment banker said net revenues in the fourth-quarter ending in December was flat at $34.2 billion.

Net income in the quarter climbed 6% to $7.73 billion or $15.46 a diluted share compared to $7.29 billion or $14.13.

UnitedHealth Group Incorporated ((UNH)) fell 3.3% or $2.47 to $72.38 after the healthcare company reported total revenues in the fourth-quarter ending in December climbed 7.9% to $31.1 billion.

Net income in the quarter surged 15% to $1.43 billion or $1.41 a diluted share compared to $1.24 billion or $1.20.