Stocks Slip on Deep Drop in U.S. Home Sales
NEW YORK (TheStreet) -- Major U.S. stock markets slipped Wednesday amid tepid Chinese economic data and a 14.5% month-over-month drop in U.S. new-home sales. Procter & Gamble
The Dow Jones Industrial Average lost 0.08% to 16,501.65, while the S&P 500 closed off 0.22% to 1,875.39. The Nasdaq declined 0.83% to 4,126.97.
- Annualized sales of new single-family homes fell much more than expected in March to 384,000, from a slightly upwardly-revised 449,000.
- "The plunge [in new U.S. home sales] raises some difficult questions about the sustainability of the housing recovery but we aren't sounding the alarm bells just yet, not least because this series can be subject to large revisions," Capital Economics wrote in a note on Wednesday.
- Chinese factory activity contracted for a fourth consecutive month, amid calls for more policy support to help economic growth. The HSBC/Markit flash Purchasing Managers Index (PMI) for April rose to 48.3 from March's result of 48.0 but remained below the 50-mark for expansion.
- In international markets, the Hang Seng closed 0.97% lower while the Nikkei was 1.09% higher. Germany's DAX fell 0.58% while London's FTSE was 0.11% lower. Tensions continue in Ukraine, where armed pro-Russia groups have occupied areas in the eastern region and refused to leave until the country's government resigns.
- U.S. manufacturers indicated a strong start to the second quarter of 2014, with the latest survey highlighting expanding levels of production, new work and employment, according to Markit Economics. At 55.4 in April, the Markit Flash U.S. Manufacturing Purchasing Managers' Index PMI was down fractionally from 55.5 in March but still well above the neutral 50 value. Expectations were for a 56.3 result in April.
- Big losers in the S&P 500 included International Game Technology
, off 10.3%, Intuitive Surgical , down 11.5%, and Amgen , sliding 5%. Some analysts suggested the global outlook for International Game Technology was challenged when the company posted results on Tuesday.
Delta Air Lines
jumped 6.1% after beating first-quarter earnings expectations by 4 cents at 33 cents a share. Boeing added 2.4% after topping quarterly earnings estimates by 20 cents at $1.76 a share.
- Facebook reported earnings of 34 cents a share, ex-items, which beat Wall Street expectations by 10 cents. Shares were gaining more than 2.5% in after hours trading. Earlier, the Federal Trade Commission has given Facebook antitrust approval to acquire virtual reality goggle maker Oculus VR. Apple is slated to post fiscal second-quarter earnings of $10.19 a share.
was expected to report after the market closed.
- Procter & Gamble was edging lower after posting revenue below expectations. Revenue was $20.56 billion, down from $20.6 billion in the same period last year.
rose 1.4% after announcing late Tuesday a more than doubling in first-quarter profit to $1.33 a share, bolstered by sales of its hepatitis C drug Sovaldi.