Wall St slips after six-day S&P run; biotechs drop

Last Updated: Wed, Apr 23, 2014 18:52 hrs

By Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stocks declined on Wednesday after a six-session winning streak as gains in Boeing and Gilead were offset by slides in AT&T and the wider biotech sector.

AT&T Inc fell 3.6 percent to $35 a day after the Dow component reported adjusted earnings that beat expectations by a penny, though that was offset by weak service revenue growth. Verizon Communications shed 1.2 percent to $47.36 while the S&P telecom sector index dropped 2.1 percent, easily making it the session's worst-performing sector so far.

Biotech shares tumbled, pulling the Nasdaq lower. Amgen Inc slid 5.9 percent to $112.23 a day after the company reported earnings that missed forecasts. Biogen Idec Inc fell 1.3 percent to $302.50 despite a strong outlook.

Both the Nasdaq biotech index and NYSEArca biotech index lost 1.5 percent.

"You’ve got some big numbers coming out from companies that have already been pretty volatile in the Nasdaq, and there is some caution against the potential for shortfalls that could restart Nasdaq on the way down," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

"This is traditionally not going to be a particularly strong time for earnings reports, and it’s easy to take less inspiring numbers and say this market is overvalued or pass them by and say this is a seasonally low point. So it really is more about investors’ own view of how high a multiple they are willing to pay."

But there were bright spots within the sector. Gilead Sciences Inc rose 2.4 percent to $74.64 and Illumina Inc gained 5.3 percent to $155.81 after the companies posted their quarterly results late Tuesday.

Boeing Co reported first-quarter revenue that beat expectations and lifted its core earnings forecast to reflect a tax settlement gain, sending its stock up 2.1 percent to $130.18 and giving the biggest boost to the Dow.

The Dow Jones industrial average fell 25.43 points or 0.15 percent, to 16,488.94. The S&P 500 slipped 4.66 points or 0.25 percent, to 1,874.89. The Nasdaq Composite dropped 35.044 points or 0.84 percent, to 4,126.414.

Better-than-expected earnings have boosted Wall Street lately, though companies have largely been beating reduced forecasts. According to Thomson Reuters data, profits are seen rising 1.6 percent this quarter, down from the 6.5 percent growth rate estimated at the start of the year.

Of the 141 companies in the S&P 500 that have posted results so far, 65.2 percent have topped expectations, according to Thomson Reuters data, above the long-term average of 63 percent. On the revenue side, 53.6 percent have exceeded forecasts, below the 61 percent long-term average.

Procter & Gamble Co's earnings topped analysts' forecasts but revenues were flat. The stock slipped 0.5 percent to $80.17.

New home sales dropped 14.5 percent in March, tumbling more than expected to an eight-month low. The PHLX housing sector index fell 1.2 percent, with D.R. Horton Inc off 3.3 percent at $21.13.

(Editing by Jan Paschal)

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