US stocks fall, S&P’s longest rally in 7 months snapped
The S&P 500 ended its longest winning streak since January after an earnings report from Coca-Cola (NYSE:KO) showed declining profits in the last quarter. Poor sales in North America are largely to blame, as soda sales declined 4 percent. Coca-Cola’s overall North American sales declined 1 percent, despite a boost in the Asian markets, most notably Vietnam and Indonesia. The global beverage producer is increasingly relying on emerging markets for growth opportunities, as demand for soda continues to decline in North America.
Coke shares declined more than 2 percent following the earnings report, hitting a low of $39.50 before closing the New York session at $40.23. This in-turn impacted most of the major indices containing Coca-Cola shares, including the S&P 500, Dow Jones Industrial Average and the NASDAQ Composite.
The S&P 500 was down 0.37 percent, closing the day at 1,676.26. Over the past five days the S&P has reached consecutive record highs, advancing more than 1.3 percent over that period. The Dow Jones Industrial Average was down 0.21 percent to close at 15,451.80. Over the past month the DJI has advanced more than 2 percent on the back of strong earnings reports. The NASDAQ also declined on Coke shares, losing 0.25 percent to close at 3,598.50. Despite Tuesday’s decline, NASDAQ registered the biggest five-day gain of all the indices, advancing more than 2.6 percent since last Tuesday.
Weak Coke shares weren’t the only reason for the decline in US stocks. Earlier in the day Kansas City Federal Reserve President Esther George reaffirmed her faith in economic recovery, signalling that the US economy was on the right track and that tapering of the Fed’s asset purchase program was an appropriate next step. George also remarked about inflation, asserting that the current pace of recovery likely won’t necessitate lower rates for much longer. These remarks come less than a week after Fed Chairman Ben Bernanke reassured markets that the days of loose monetary policy weren’t over, and that stimulus was still needed to keep the US economy’s conditions favourable.
Central bank stimulus has helped both the stock and commodity markets over the past four years. In 2009 the first round of quantitative easing helped erase 12-year lows for the S&P, which soared by as much as 149 percent after its March 2009 low.
Sorry. No data so far.