Market report

Mixed earnings weigh on stocks

Box, Inc. Chairman, CEO & co-founder Aaron Levie right, and company CFO and co-founder Dylan Smith, prepare to ring the New York Stock Exchange opening bell, marking their company's IPO on the floor of the New York Stock Exchange, Friday, Jan. 23, 2015. Box Inc. shares soared 56 percent in their stock market debut, after the online storage provider raised $175 million in its initial public offering. (AP Photo/Richard Drew)
Box, Inc. Chairman, CEO & co-founder Aaron Levie right, and company CFO and co-founder Dylan Smith, prepare to ring the New York Stock Exchange opening bell, marking their company's IPO on the floor of the New York Stock Exchange, Friday, Jan. 23, 2015. Box Inc. shares soared 56 percent in their stock market debut, after the online storage provider raised $175 million in its initial public offering. (AP Photo/Richard Drew)

NEW YORK -- A batch of mixed earnings reports Friday helped push two major stock indexes to their first day of losses this week.

The Standard & Poor's 500 index fell 11.33 points, or 0.6 percent, to 2,051.82. The Dow Jones industrial average slipped 141.38 points, or 0.8 percent, to 17,672.60. The Nasdaq composite bucked the trend, gaining 7.48 points, or 0.2 percent, to 4,757.88.

Despite Friday's fall, stocks ended with their first weekly gain of the year.

Shares of tissue- and diaper-maker Kimberly-Clark dropped after the company's earnings fell short of expectations and it gave a disappointing outlook. Package-delivery service UPS plunged after it cut its earnings forecast.

Strong growth in company earnings have underpinned a bull run in stocks that has stretched for nearly six years. Earnings are still expected to keep rising, but the pace of growth is slowing, and investors are looking for signs that sales are up.

"Our view is that the market is poised to have a reset to reflect what we think is a lower growth environment," said James Abate, chief investment officer of Centre Funds, an asset management company.

Stocks have wavered since the start of the year on signs that economic growth outside of the U.S. was slowing. Many investors worried that a pronounced slowdown would eventually curb the U.S. economic recovery.

"Anything that can stem the contagion and stop the malaise from spilling over ... that allows our bull market to continue," said Jerry Braakman, chief investment officer of First American Trust in Santa Ana, Calif.

For the week, the S&P 500 edged up 1.6 percent while the Dow rose 0.9 percent.

But on Friday, earnings from some big-name companies weighed down the market.

Kimberly-Clark reported a fourth-quarter loss of $83 million. The company also forecast weaker sales in 2015. The stock dropped $7.33, or 6.2 percent, to $111.65.

UPS said it was hurt by the cost of guaranteeing punctual Christmas deliveries. That forced the shipping company to cut its outlook for the year. UPS hired more workers and increased capacity at its facilities before Christmas to avoid a repeat of 2013, when shippers struggled with a deluge of orders. Its stock slumped $11.32, or 9.9 percent, to $102.93.

Oil resumed its slump after stabilizing last week. Benchmark crude finished down 72 cents to $45.59 a barrel on Friday. For the week, oil was also down, extending a slump that has cut the price by more than half since June.

As a result of oil's fall, weaker results from energy companies are expected to hurt profits for S&P 500 companies in the fourth quarter. But overall earnings are expected to grow by 4.1 percent in that period, according to data from S&P Capital IQ. That's slower than the 4.9 percent increase a year earlier. Revenue is expected to rise 2 percent.

Not all earnings reports on Friday disappointed.

Starbucks quarterly earnings rose 82 percent. The company's stock jumped $5.48, or 6.6 percent, to $88.22.

In government bond trading, prices rose. The yield on the 10-year government bond fell to 1.79 percent from 1.87 percent Thursday.

Business on 01/24/2015

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