June 27 (Bloomberg) -- Most U.S. stocks fell, extending the Dow Jones Industrial Average's worst monthly drop in almost six years, as record oil prices dragged down consumer shares and mobile-phone companies declined on concern demand is waning.
AT&T Inc. and Verizon Communications Inc. dropped after London-based Sony Ericsson Mobile Communications Ltd. said demand for more expensive phones is weakening. KB Home tumbled after the real-estate developer reported its fifth straight quarterly loss. American International Group Inc., the world's largest insurer, slid on plans to absorb as much as $5 billion of losses for a dozen units hit by writedowns.
More than four stocks declined for every three that rose on the New York Stock Exchange. The Standard & Poor's 500 Index added 0.68 points to 1,283.83 at 12:26 p.m. in New York. The index dropped 2.9 percent yesterday, the steepest decline since June 6. The Dow lost 41.69, or 0.4 percent, to 11,411.73, down 9.7 percent this month in its worst June since 1930. The Nasdaq Composite Index slipped 6.39 to 2,314.98.
``This week the news on earnings is that the second quarter is probably going to be worse than we thought,'' said Ron Sweet, vice president of equity investments at USAA Investment Management Co., which oversees $100 billion in San Antonio. ``The old news keeps sticking around: it's energy prices, it's writeoffs at banks, it's the slow economy.''
The S&P 500 has fallen 2.5 percent this week, while the Dow has slid 3.6 percent and the Nasdaq tumbled 3.7 percent. The four consecutive weeks of declines for the S&P 500 is the index's longest losing streak since January. The S&P 500's 8.3 percent decline so far in June is the worst monthly performance since the 11 percent plunge in September 2002.
Earnings Slump
Analysts forecast earnings for companies in the S&P 500 will slump 11 percent on average, according to a Bloomberg survey today, compared with a projected decline of 8.9 percent a week ago. Goldman Sachs Group Inc. strategist David Kostin said in a report today that expectations for 2008 and 2009 profits are ``too optimistic'' and are likely to be reduced.
AT&T decreased 34 cents, or 1 percent, to $33.13. Verizon lost 12 cents to $34.19.
Palm Inc. dropped 61 cents to $5.93. The maker of the Treo e-mail phone reported a wider fourth-quarter loss than analysts estimated.
AIG Slides
American International Group Inc. decreased 37 cents to $27.73. The world's largest insurer plans to absorb as much as $5 billion of losses for a dozen insurance units after their securities-lending accounts suffered $13 billion of writedowns tied to the subprime-mortgage collapse during the past year.
Micron Technology Inc., the largest U.S. producer of memory chips, tumbled 63 cents to $6.36 after posting a wider third- quarter loss as prices plunged for semiconductors used to store pictures and music in portable devices.
U.S. stocks tumbled yesterday as oil's $5-a-barrel surge, forecasts of more credit-market writedowns and a slowing economy threatened to extend a yearlong profit slump.
``The month of June has been difficult,'' Matthieu Bordeaux- Groult, who helps oversee about $6.2 billion as fund manager at Richelieu Finance in Paris, said in a Bloomberg Television interview. ``There are a lot of negative elements in the market such as high raw materials prices, but valuations are low and offer buying opportunities.''
The S&P 500, which has fallen 13 percent this year, is valued at 21.3 times earnings, near the lowest in two months.
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