U.S. stocks were little changed, after equities slipped to a two-month low yesterday, as declines in Sprint Corp. and Time Warner Inc. (TWX:US) on merger news offset gains in consumer-staples shares.
Sprint slid 19 percent after a person with knowledge of the matter said it ended talks to acquire T-Mobile US Inc. Time Warner tumbled 13 percent after Rupert Murdoch’s 21st Century Fox Inc. withdrew its unsolicited takeover bid. Molson Coors Brewing Co. and Kellogg Co. led gains in consumer-staples shares.
The Standard & Poor’s 500 Index fell less than one point to 1,920.16 at 4 p.m. in New York. The gauge erased an earlier loss after dropping below its average level for the past 100 days.
“There’s going to be a lot of noise intraday going forward, but we still see the fundamental trend moving higher,” Sam Turner, a fund manager with Richmond, Virginia-based Riverfront Investment Group LLC, said in a phone interview. His firm oversees $4.6 billion. “We might slip back to flush out the remaining weak hands, but we’re recommending buying this dip.”
The S&P 500 slid 1 percent yesterday to the lowest level since May as tensions escalated over Ukraine. The benchmark gauge has lost 3.4 percent since reaching a record of 1,987.98 on July 24. It tumbled the most since June 2012 last week as companies around the globe posted disappointing results, Argentina defaulted and Banco Espirito Santo SA was ordered to raise capital.
Russian President Vladimir Putin is showing no sign of backing down over Ukraine. He ordered restrictions on food imports to strike back at the U.S. and other countries that have imposed sanctions on Russia over the turmoil in Ukraine. Putin’s decree bans or limits food and agricultural imports for one year from countries that have imposed or supported sanctions, according to the Kremlin website.
NATO Deputy Secretary General Alexander Vershbow said that Russia has amassed about 20,000 troops along its border with eastern Ukraine.
Stocks have also been weighed down by concerns that the improving economy may force the Federal Reserve to raise interest rates sooner than expected. Data last week showed U.S. gross domestic product expanded at a 4 percent annual pace in the second quarter, confirming the Fed’s view that a first-quarter contraction was transitory.
The S&P 500 has soared 184 percent since the start of the bull market in March 2009, boosted by three rounds of central bank stimulus and better-than-forecast corporate earnings. The benchmark equity gauge has gone without a 10 percent correction since 2011. It trades at 17.4 times the reported earnings of its companies, after reaching the highest level since 2010 in June.
Keurig Green Mountain Inc. and Prudential Financial Inc. are among 25 S&P 500 companies reporting earnings today. About 75 percent of those that have posted results this season have beaten analysts’ estimates for profit, while 64 percent exceeded sales projections, data compiled by Bloomberg show.
Profit probably rose 9.4 percent in the second quarter, while sales gained 4.2 percent, according to analyst estimates compiled by Bloomberg.
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