U.S. stocks fall for third day; Spanish yields up
NEW YORK (MarketWatch) -- U.S. stocks on Monday lost ground for a third session, the longest such streak in more than a month, after Spanish bond yields rose to levels viewed as unsustainable and ahead of earnings from
The Dow Jones Industrial Average (DJIA) ended down 36.18 points, or 0.3%, at 12,736.29. It's lost more than 207 points over the last three sessions.
On Monday, DuPont (DD) and
Alcoa Inc. (AA) ended slightly up ahead of its second-quarter results. Excluding charges, Alcoa's earnings were sharply down from a year ago, but edged past Wall Street's forecasts. Read more on Alcoa.
The aluminum maker's quarterly results mark the unofficial start of reporting for U.S. company earnings. But the second-quarter earnings season actually started a few weeks ago when
"What we're seeing is rates of growth are slowing to about 9%. Those same companies reported 15% growth last quarter, so that's a significant slowing of growth," he said.
Of the 25 companies that have reported second-quarter results, 72% have lowered third-quarter estimates, compared with 44% that reduced expectations after reporting first-quarter results, Raich added.
On Friday, Dow component J.P. Morgan Chase & Co. (JPM) reports, with Chief Executive Jamie Dimon offering his best guess as to how much the bank lost in bad trades.
The S&P 500 Index (SPX) declined 2.22 points, or 0.2%, at 1,352.46, with natural-resource stocks the hardest hit and health care the best performing of its 10 industry groups. As with the Dow, the S&P 500 has fallen for three straight days, the first such streak since early June.
The Nasdaq Composite Index (COMP) shed 5.56 points, or 0.2%, at 2,931.77.
Decliners edged past advancers on the New York Stock Exchange, where 649 million shares traded. NYSE composite volume was about 2.9 billion, or less than 80% of the past month's average.
The price of oil rose as a labor dispute threatened to stop production in Norway, with crude futures for August delivery (CLQ2) climbing $1.54 to end at $85.99 a barrel on the New York Mercantile Exchange. Gold futures (GCQ2) finished the floor session at $1,589.10 an ounce, up $10.20, or 0.7%. Read more on gold.
At the White House, President Barack Obama on Monday urged Congress to pass a one-year extension of Bush-era tax cuts for families earning under $250,000 a year, while letting tax cuts for upper-income earners lapse.
Speaking at a news conference, Obama said he might feel differently in a time of budget surpluses, rather than when the nation is grappling with a large deficit. Read more about the president seeking to extend middle-class tax cuts.
The 7% level was seen as the point of no return for Greece, Ireland and Portugal, pushing those nations to request aid from euro-zone partners and the International Monetary Fund.
While it's difficult to be overly bullish, it's equally hard to be overly bearish "because central bankers are stepping in and doing everything they can to prop up the global economy and asset prices," according to Key Private Bank's Raich.
"Because inflation is easing they'll have little choice but to step in with something big to bring down those soaring bond yields in Spain and Italy. Something has to be done to bring those borrowing costs down for those rather large economies," he said.