This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Stocks Tumble as Tech, Bank Earnings, Outlook Disappoint

NEW YORK ( TheStreet) -- U.S. stock markets dropped on Wednesday as technology and financial stocks led a broad-based decline after earnings reports from Bank of America (BAC - Get Report), Yahoo! (YHOO), and Intel (INTC) disappointed investors on soft guidance.

The S&P 500 fell 1.43% to 1,552.

Bank of America plunged 4.7% to $11.70 after the Charlotte, N.C-based banking giant reported bottom-line results that missed expectations on lower mortgage-banking income .

"This rally has gone beyond what's justifiable, primarily because most of the [earnings] numbers were better than expected, but revenue has lacked the historical norm," said Jeffrey Sica, chief investment officer of Sica Wealth Management. "There's this anticipation that for the remaining companies to report, they're going to report disappointments in earnings."

The Dow Jones Industrial Average was off 0.9% to 14,618.59 while the Nasdaq dropped 1.8% to 3,204.67.

Yahoo!, the Internet giant, posted quarterly earnings that beat Wall Street expectations but revenue was less-than-expected and guidance also came in short of estimates. Shares slipped 0.34% to $23.71 after declining as much as 2.8%.

Intel, the world's largest semiconductor maker, edged past Wall Street's sales estimates for the first-quarter in results released Tuesday afternoon even as earnings fell below forecasts. For its fiscal second quarter, Intel expects revenue of $12.9 billion, plus or minus $500 million, broadly in line with Wall Street's forecast of $12.85 billion. Shares gained 0.07% to $21.93.

"We are in the heart of earnings season and although most companies have beaten the EPS estimates, once again the major concern is that revenue and outlooks have been weak," Ryan Detrick, a Cincinnati-based senior technical strategist at Shaeffer's Investment Research said in an email.

The FTSE 100 in the UK fell 1% and the DAX in Germany tumbled 2.3%.

Market reaction was muted when the Federal Reserve presented its Beige Book report suggesting that overall economic activity expanded at a moderate pace between late February and early April. The report is published about two weeks before the next monetary policy meeting.

A standout amidst all the lackluster quarterly filings was Mattel (MAT - Get Report), which gained 1.9% to $43.78 to become the top S&P 500> gainer after the toymaker declared a dividend of 36 cents a share and reported first-quarter net income that surged, thanks to an increase in sales of Monster High and American Girl products.

Another prominent gainer was Abbott Laboratories (ABT - Get Report), up 2.4% to $37.28 in morning trading after the medical device and nutritional products company said that the emerging markets that its Established Pharmaceuticals unit focuses on could deliver double-digit growth for the year. The company also said that its Nutrition segment is sticking to its plan to expand its full-year operating margin to 20% of sales by 2015.

Bank of New York Mellon (BK - Get Report) shed 2.1% to $27.19 after reporting a pre-announced net loss and missing the consensus estimate for first-quarter operating earnings.

WTI crude oil for May delivery plummeted $2.04 to close at $86.68 a barrel on the New York Mercantile Exchange, while gold for June delivery at the COMEX division of the CME was down $4.70 to settle at $1,382.70.

The benchmark 10-year Treasury was rising 7/32, diluting the yield to 1.702%. The dollar was surging 1.03% to $82.67 according to the U.S. dollar index.

Written by Andrea Tse and Joe Deaux in New York

>To contact the writer of this article, click here: Andrea Tse.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
ABT $46.02 0.00%
BK $40.67 0.00%
BAC $16.36 0.00%
MAT $23.20 0.00%
AAPL $113.29 0.00%

Markets

Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs