U.S. stocks fell, erasing earlier gains, as the Standard & Poor’s 500 Index (CME:SPU13) failed to hold above its average level from the past 50 days and investors awaited a monthly jobs report and the start of corporate earnings.
DaVita HealthCare Partners Inc. (NYSE:DVA) tumbled 6.3% after the government proposed reducing payments to dialysis-center operators. Constellation Brands Inc. (NYSE:STZ)slumped 3.2% after posting first-quarter earnings that trailed analysts’ estimates. Ford Motor Co. (NYSE:F)and Abercrombie & Fitch Co. (NYSE:ANF) added at least 2.9% amid optimism over sales. Zynga Inc. (NASDAQ:ZNGA)jumped 5.5% after naming a new chief executive officer.
The S&P 500 slipped 0.2% to 1,612.11 at 3:21 p.m. in New York, after rising as much as 0.6% earlier. The Dow Jones Industrial Average (CBOT:DC) dropped 67.35 points, or 0.5%, to 14,907.61. Trading in S&P 500 stocks was 5.7% below the 30-day average during this time of day.
“The market is trying to find some ability to hold in there,” Jason Cooper, who helps oversee $2.5 billion in South Bend, Indiana, at 1st Source Investment Advisors, said in a phone interview. “It’s going to take some actual data to come in to at least reassure investors that the economy is doing OK and people are getting jobs. Corporate America is going to be the important one right now. The Fed has pretty much said what they have to say and not rock the boat any more.”
Stocks climbed earlier as factory orders topped estimates and the Federal Reserve’s William Dudley reiterated that the central bank may prolong bond purchases if needed. The S&P 500 reversed gains after momentarily rising above its 50-day moving average near 1,624. The benchmark gauge also pared gains yesterday after briefly exceeding the technical level.
Goldman Sachs Group Inc. cut its growth forecast for second-quarter U.S. gross domestic product by one-tenth to 1.7% after a slower-than-estimated expansion in manufacturing inventories.
Data tomorrow from the ADP Research Institute may indicate American companies increased employment in June. Investors will watch the monthly U.S. labor report later this week for further signs of economic strength. Employers in the U.S. probably created 165,000 jobs in June, almost the same as in the prior month, according to the median forecast of economists in a Bloomberg survey ahead of July 5 figures from the Labor Department. The unemployment rate probably fell to 7.5%, matching April’s four-year low.
Alcoa Inc. will unofficially start the second-quarter earnings season after the market close on July 8, as the biggest U.S. aluminum producer becomes the first company in the Dow to report results. Profits from S&P 500 companies probably grew 2.4%, according to analyst estimates compiled by Bloomberg. That’s down from a projected increase of 6.2% at the beginning of the quarter.