U.S. stocks fell, sending benchmark indexes toward their biggest declines since June, as Microsoft Corp. and General Electric Co. results missed estimates and euro-area leaders failed to discuss aid for Spain at a summit.
Microsoft slid 3.3 percent after the largest software maker posted earnings that fell short of estimates. General Electric lost 3.5 percent as third-quarter revenue missed forecasts. McDonald’s Corp. slumped 4.3 percent as sales growth slowed at U.S. stores. Advanced Micro Devices Inc. dropped 17 percent after announcing a plan to cut staff by 15 percent.
The Standard & Poor’s 500 Index S&P 500 retreated 1.6 percent to 1,433.92 at 3:44 p.m. in New York, on the 25th anniversary of the worst one-day stock crash in history. The equity benchmark has trimmed its gain for the week to 0.4 percent. The Dow Jones Industrial Average declined 189.38 points, or 1.4 percent, to 13,359.56 today. Trading in S&P 500 companies was 22 percent above the 30-day average at this time of day.
“The market is saying not so fast,” said Quincy Krosby, a market strategist for Newark, New Jersey-based Prudential Financial Inc., which oversees $961 billion. “People have been waiting for positive earnings surprises given that expectations have been lowered enough. In addition, there’s a perception that the European problems still have to be dealt with. Europe remains a headline risk.”
U.S. stocks snapped a three-day rally yesterday after Google Inc.’s third-quarter earnings missed analysts’ estimates. The S&P 500 has climbed 14 percent so far this year as economic data topped estimates, companies posted better-than-expected earnings and the Federal Reserve announced a third round of bond purchases.
Per-share profits trailed analyst forecasts at half of the 18 companies in the S&P 500 that released results since the close of trading yesterday. Since the start of the earnings season, profits have exceeded estimates at about 69 percent of the 116 companies in the S&P 500 that released results, according to data compiled by Bloomberg.
A European Union summit failed to discuss further financial assistance for Spain, according to French President Francois Hollande. Germany and France agreed to enforce common banking regulation for the euro area’s 6,000 lenders by the end of next year.