Stocks Slip on Lackluster Earnings as Fed's Fisher Signals Pullback
NEW YORK (TheStreet) -- U.S. stocks slipped on Tuesday amid a slate of lackluster earnings while Dallas Federal Reserve President Richard Fisher warned investors to prepare for a pullback of central bank stimulus.
The S&P 500 dropped 0.2% to 1,767.68 while the Dow Jones Industrial Average retreated 0.2% to 15,750.67. The Nasdaq was little changed at 3,919.92.
While the U.S. economy has improved in the years since the 2008 recession, doubts remain as to whether the recovery can continue to gain strength if the Federal reserve elects to reduce the size of its stimulus program. At present, the Fed buys about $85 billion in assets each month.
Last week's jobs reports bolstered the outlook that the Fed could begin to taper its bond buying. The Fed's Fisher in a speech in Melbourne said the bank's current level of stimulus "becomes riskier by the day."
In corporate news, x-ray company Hologic (HOLX) tumbled 10% to $20.51 after its 2014 sales forecasts fell short of analysts' expectations while milk producer Dean Foods (DF) lost 7.7% to $18.20 after cutting its full-year earnings forecast. The company will begin paying a dividend of 7 cents a share in the first quarter.
News Corp (NWSA) declined 1.6% to $17.15 after the owner of The Wall Street Journal posted sales that missed analysts' forecasts, sparking investor concern about its legacy print business. The company, controlled by Rupert Murdoch, reported $2.07 billion in revenue for the fiscal first quarter, falling short of an average $2.18 billion estimate of eight analysts surveyed by Bloomberg.
T-Mobile US (TMUS) dropped 3.3% to $26.09 after offering almost $1.8 billion in new stock. The mobile phone carrier plans to sell 66.2 million shares in a secondary offering to raise money for a potential wireless spectrum purchase, either from other parties or through government auctions.And Sarepta Therapeutics (SRPT) all but crashed, losing 64% to $13.05 as regulators suggested the biopharmaceutical company has further hurdles to clear before filing a drug application for its experimental treatment for Duchenne muscular dystrophy. Gold futures were off $6.20 to $1,274.90 an ounce while ten-year U.S. Treasuries were dropping 8/32, bolstering the yield to 2.778%. Oil was slipping 85 cents to $94.29 a barrel while the U.S. dollar was up 0.09% to $81.16. --Written by Andrea Tse in New York
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