April 30 (Bloomberg) -- U.S. stocks dropped, reversing a 1.7 percent surge in the Standard & Poor’s 500 Index, as Exxon Mobil Corp. drove energy companies lower and the government pushed Chrysler LLC into bankruptcy.
Exxon fell 2.6 percent after the world’s largest company by market value posted the biggest profit drop since 2002. Procter & Gamble Co., the largest household-products maker, slid 1.9 percent as a sales slump prompted a reduction in the company’s full-year earnings forecast. Dow Chemical Co. soared 18 percent following its unexpected profit, limiting the market’s retreat.
The S&P 500 fell 0.1 percent to 872.81, giving the benchmark index for U.S. stocks a 9.4 percent rally in April. That’s the steepest monthly advance since March 2000. The Dow Jones Industrial Average slumped 17.61 points, or 0.2 percent, to 8,168.12 today. Shares in Asia climbed and Europe’s Dow Jones Stoxx 600 Index recouped its 2009 loss.
“An event like Chrysler going into bankruptcy reminds people that there’s still a lot of stuff out there that needs to be figured out,” said Sarah Hunt, a fund manager for Purchase, New York-based Alpine Mutual Funds, which oversees about $5 billion. “It tempers enthusiasm.”
Stock indexes began paring their advance midday, costing the S&P 500 the best monthly performance since 1991. The April rally was fueled by companies from Wells Fargo & Co. to Ford Motor Co. beating analysts’ profit estimates. Almost 70 percent of companies in the index that have reported since April 7 topped projections, the highest proportion since the end of 2006. The Russell 2000 Index of small U.S. companies briefly erased its 2009 loss today by rallying as much as 2 percent.
Oil, Gas Prices
Exxon fell 2.6 percent to $66.67. Profit of 92 cents a share trailed the average analyst estimate by 3.6 percent as the global recession sapped energy demand, pulling down oil and gasoline prices.
Energy producers in the S&P 500 lost 2.1 percent as a group, the most among 10 industries. Chevron Corp. retreated 2.2 percent to $66.10. Schlumberger Ltd. slumped 2.1 percent to $48.99.
Chrysler LLC, the automaker that survived a near-death experience in 1979, filed today for bankruptcy protection to streamline operations and shed debt in a reorganization that includes Italy’s Fiat SpA as a partner.
The company, third-biggest among U.S. automakers, missed a U.S. government deadline to come up with a restructuring plan by today that was rigorous enough to avoid bankruptcy and qualify for more bailout aid. The carmaker tried to negotiate an alliance with Fiat, reduce $6.9 billion in secured loans and cut $10.6 billion owed to a pension fund. Some lenders refused to slash the debt to $2.25 billion.
GM, Ford, Toyota Rise
General Motors Corp. and Ford, Chrysler’s U.S.-based rivals, jumped more than 6.1 percent. American depositary receipts of Toyota Motor Corp., Japan’s biggest automaker, added 1.1 percent to $79.16.
P&G slipped 1.9 percent to $49.44. The company, which makes everything from potato chips to laundry detergent, said revenue fell as the stronger dollar reduce the value of sales from outside the U.S.
McDonald’s Corp., Kroger Co. and Office Depot Inc. slid more than 2 percent as U.S. consumer spending fell more than forecast at the end of the first quarter, according to the Commerce Department. Other reports showed wages and benefits rose at the slowest pace on record and firings continued, straining American workers and threatening to weigh on a projected economic recovery later this year.
Global Rally
Global equities advanced, pushing the MSCI World Index up 0.8 percent, as companies from Visa Inc. to BASF SE better-than- estimated income and Honda Motor Co. forecast an annual profit. Industrial output in Japan increased for the first time in six months. U.K. consumer confidence climbed to a one-year high.
“All the things are in place for the bear market to have ended,” Anthony Bolton, president of investments at Fidelity International, said in an interview with Bloomberg Television in Hong Kong. “When there’s a strong consensus, a very negative one, and cash positions are very high, as they are at the moment, I’d like to bet against that.”
Fidelity International is the London-based affiliate of Fidelity Investments, the world’s largest mutual-fund company. Bolton’s Special Situations Fund beat the FTSE All-Share Index on an annual basis by 6 percentage points from 1979 through 2007, according to Fidelity.
Seeds, Pesticides
Dow, the largest U.S. chemical maker, added 18 percent to $16. The largest U.S. chemical maker reported first-quarter profit, while analysts forecast a loss, as demand for seeds and pesticides boosted earnings in the agriculture unit.
S&P 500 commodity producers other than energy companies climbed 3 percent as a group to the highest level since November. The group of mining companies, fertilizer producers and chemical makers has gained 12 percent this year, the second- steepest rally among 10 S&P 500 industries. Technology stocks hold the top spot with a 16 percent surge.
Visa increased 2.3 percent to $64.96. The world’s largest electronic payments network beat the average analyst profit estimate as consumers relied more on debit cards. The company, which collects fees to shuttle payments between financial institutions, has three-quarters of the U.S. debit card market by purchase volume. Motorola Inc. fell the most in almost two months, tumbling 7.2 percent to $5.53. The biggest U.S. mobile-phone maker reported revenue, which has fallen for a nine straight quarters, below analysts’ forecasts.
Expedia Inc. posted the steepest advance since it began trading in 2005, surging 29 percent to $13.61. The world’s largest online travel agency reported first-quarter earnings excluding some items of 21 cents a share, beating the average analyst estimate by 40 percent.
“People are starting to look at zero returns from short- term instruments and saying to themselves, ‘I’ve got to do better than this’ and if the market continues to run, they’re out of a job,” Marshall Front, who oversees about $500 million in Chicago as chairman of Front Barnett Associates LLC, said in a Bloomberg Television interview.
No comments:
Post a Comment