WTI crude continues drop

U.S. stocks fell, led by industrial shares, and oil retreated after data showed fewer Americans than forecast signed contracts to buy previously owned homes. Chinese shares in Hong Kong entered a bull market.

The Standard & Poor’s 500 Index slid 0.4 percent to 1,970.87 as of 10:03 a.m. in New York. West Texas Intermediate crude dropped for a third day, falling 0.9 percent. The dollar was at $1.3437 per euro, near the strongest level in eight months. The Hang Seng China Enterprises Index rose 0.7 percent, while Russian stocks and the ruble slumped amid the threat of further sanctions.

The housing data suggested that residential real estate is struggling to strengthen as an index of pending home sales declined 1.1 percent from the month before after rising 6 percent in May, figures from the National Association of Realtors showed. The Federal Reserve announces its next policy decision at the conclusion of a two-day meeting on July 30. Investors will get a reading on second-quarter growth that same day, while the government’s labor report on Aug. 1 may show employers added 231,000 jobs this month.

“There is a lot of economic data and a lot of earnings coming out this week,” Jonathan Corpina, senior managing partner at Meridian Equity Partners who works on the floor of the New York Stock Exchange, said by phone. “The bigger headline here is the M&A activity we continue to see, which is a positive for the market.”

The difference between five- and 30-year Treasuries yields narrowed to the least since 2009 as subdued inflation supported longer maturities.


Fed Meeting

The Fed’s Open Market Committee will scale back its monthly asset purchases to $25 billion from $35 billion on July 30, according to economists surveyed by Bloomberg, keeping it on pace to end the program late this year. The policy-making committee last month repeated it’s likely to “reduce the pace of asset purchases in further measured steps” and that it expects interest rates to stay low for a “considerable time” after the bond-buying ends.

Chair Janet Yellen and her fellow policy makers are debating how long to keep interest rates near zero as the U.S. labor market improves and inflation moves closer to the Fed’s 2 percent goal.

Russia’s Micex lost 1.9 percent, extending declines from this year’s peak to more than 10 percent. The ruble retreated for a third day, heading for the weakest level since May. Satellite photos show Russia has shelled across the border into Ukraine, the U.S. said.


Catalytic Converters

Rhodium advanced to the highest price in 16 months and is set for the biggest monthly gain since 2009 as demand from carmakers increased amid restricted supply. The metal, used in catalytic converters to curb harmful emissions, climbed to $1,250 an ounce on July 25, the highest since March 26, 2013, Johnson Matthey data on Bloomberg show.

Pfizer Inc., Reynolds American Inc. and American Express Co. are among some 150 S&P 500 companies reporting this week. About 79 percent of U.S. companies that have posted results this season have beaten analysts’ estimates for profit, while 66 percent exceeded sales projections, according to data compiled by Bloomberg.

Quarterly profit growth is poised for the fastest increase in almost three years. Companies in the S&P 500 have reported an 11 percent gain in second-quarter earnings, data compiled by Bloomberg show. Should the pace continue, the gain would exceed all periods since the third quarter of 2011.

“It is quite an important week in terms of earnings reports,” Raimund Saxinger, a fund manager at Frankfurt-Trust Investment GmbH, which oversees about $22 billion, said in a phone interview. “Earnings have been good and markets want to see that this is going to carry on.”

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