NEW YORK — Weak earnings reports from big U.S. companies sent the Standard & Poor’s 500 index down slightly Wednesday, but the Dow Jones industrial average eked out a gain.
The Standard & Poor’s 500 slipped 0.42 point, or 0.03 percent, to end at 1,337.89. The tiny loss extended the broad index’s losses to a fourth-straight day. A big reason was Apple, which dropped $22.12 to $578.80, a loss of 4 percent. A sharp drop in new-home sales also fed the selling.
The Dow Jones industrial average rose 58.73 points, or 0.5 percent, to 12,676.05. That snapped a three-day, triple-digit losing streak for the index.
Rising stocks outpaced losing ones on the New York Stock Exchange. Consolidated volume was an average 3.6 billion shares.
Helping the Dow were big gains from two of its components, Boeing and Caterpillar. The duo contributed 24 points to the index, or nearly half of its gain.
Boeing rose $2, nearly 3 percent, to $74.03 after reporting surprisingly strong earnings. The aircraft maker also raised its profit forecast for all of 2012.
Caterpillar blew away analysts’ estimates with a 67 percent surge in profits for the second quarter. Caterpillar credited strong sales of mining equipment overseas and a strengthening housing market.
Shortly after Caterpillar announced its results, the optimism about housing took a hit. The Commerce Department said sales of new homes fell 8 percent last month, the steepest drop since February last year. Sales in the Northeastern U.S. plummeted 60 percent. The decline suggests a weaker job market is dampening any pickup in the industry.
“Housing is not really recovering, it’s bottoming,” said Steven Ricchiuto, chief economist at Mizuho Securities, a brokerage firm. “That’s still a problem with the economy.”
The biggest loser in the S&P was Netflix, the video subscription company. It fell $20.11 to $60.28, a loss of 25 percent. The company reported late Tuesday that its net income plunged 91 percent in the latest quarter. Investors are worried about rising licensing fees and slowing subscriber growth.
Stocks were pushed higher at the opening by the gains in Caterpillar and Boeing. But the disappointing home-sales news soon cut into the gains, and trading remained choppy throughout the day.
Apple didn’t help. Late Tuesday, the company reported net income rose 21 percent in the second quarter instead of the 33 percent that analysts were expecting. The company said consumers appear to be holding off on buying iPhones before a new model comes out, even though it isn’t expected until October.
Apple makes up 12.7 percent of the Nasdaq composite, making it by far the biggest component of the technologyfocused index. The Nasdaq lagged the broader market, giving up 0.3 percent, or 8.75 points, to close at 2,854.24.
The bad news from tech stocks didn’t end there. After the closing bell, Zynga, the maker of online video games like Farmville, lowered its forecast for full-year earnings, blaming delays in introducing new games, dwindling revenue from existing Internet games and a “more challenging environment” on the Facebook platform. The stock fell 40 percent in after-hours trading.
Business, Pages 26 on 07/26/2012