Most U.S. stocks fell, following Tuesday’s gain, as a cut in the World Bank’s growth forecasts offset a rally in Apple Inc. as investors watched earnings.
Boeing Co. (NYSE: BA) slumped 3.4 percent as All Nippon Airways Co. and Japan Airlines Co., the world’s largest users of the 787 jets, grounded their entire fleet of Dreamliners.
Apple (Nasdaq: AAPL), which slid below $500 a share Tuesday for the first time in 11 months, rallied 4.2 percent to halt a three-day decline. Goldman Sachs Group Inc. (NYSE: GS) added 4.1 percent after the bank’s profit almost tripled.
The Standard & Poor’s 500 Index advanced less than 0.1 percent to 1,472.63. The Dow Jones Industrial Average declined 23.66 points, or 0.2 percent, to 13,511.23. About 5.6 billion shares changed hands on U.S. exchanges, or 8.6 percent below the three-month average.
“The cuts in growth forecasts are reminders that there’s still work to be done,” said Brad Sorensen, director of market and sector analysis at San Francisco-based Charles Schwab Corp. (Nasdaq: SCHW) His firm has $1.92 trillion in client assets. “In the U.S., it’s early to talk about the earnings season, but so far we’re relatively pleased with what we’ve seen. We’ve had a good start to the year in stocks. There’s very little doubt that there’s quite a bit of money on the sidelines that could provide a nice boost higher.”
The World Bank cut its global growth forecast for this year as austerity measures, high unemployment and low business confidence weigh on economies in developed nations. German Chancellor Angela Merkel’s government cut its growth forecast for Europe’s biggest economy. Luxembourg Prime Minister Jean- Claude Juncker said the strength of the euro poses a threat to the region’s economy.
The S&P 500 has risen 3.3 percent so far this year, extending 2012’s 13 percent surge. Yet the benchmark gauge is trading at 14.8 times reported earnings, compared with an average of 16.5 since 1954, according to data compiled by Bloomberg.
Bank of New York Mellon Corp. (NYSE: BK) slumped 2.8 percent to $26.04 and Northern Trust Corp. (Nasdaq: NTRS) dropped 5.7 percent to $49.78. Both banks have responded to near-zero interest rates by reducing staff and expenses to protect profit margins. While the banks benefited from rising stock prices, which increase fees for overseeing and managing investor money, low interest rates and slow capital-markets activity have hurt their ability to expand earnings.
Chipotle Mexican Grill Inc. (NYSE: CMG) fell 5.5 percent to $280.94 after reporting preliminary fourth-quarter profit that trailed analysts’ estimates.
Dell Inc. (Nasdaq: DELL) dropped 4.3 percent to $12.61, after rallying 21 percent over the last two days. The third-largest PC maker is discussing a leveraged buyout with private-equity firms TPG Capital and Silver Lake, a person with knowledge of the matter said this week.
Technology, which comprises the biggest group in the S&P 500, rose the most among 10 industries. Apple rose 4.2 percent to $506.09, after slumping 7.2 percent over the previous three days. The company introduced installment payment plans for buyers of iPhones and MacBook laptops in China as it struggles to compete with low-cost devices in the world’s largest computer and mobile-phone market.
Goldman Sachs rose 4.1 percent to $141.09. Chief Executive Officer Lloyd C. Blankfein, 58, has undertaken a $1.9 billion expense-reduction effort since mid-2011 and said he expected earnings growth to resume when the economy and markets improved. A stock-market rebound and a $500 million profit from selling a hedge fund-administration unit helped revenue recover from the lowest first half since 2005.
JPMorgan Chase & Co. (NYSE: JPM) gained 1 percent to $46.82. The largest U.S. bank by assets said fourth-quarter profit rose 53 percent, beating analysts’ estimates as mortgage revenue more than doubled and the lender set aside less for future losses.
Smith & Wesson Holding Corp. (Nasdaq: SWHC) rose 5.7 percent to $8.91. President Barack Obama proposed the most ambitious set of gun control proposals in decades, calling for a renewal of a ban on assault weapons and high-capacity ammunition magazines and setting out 23 executive actions he’ll take such as ordering agencies to share data for background checks and addressing mental health issues.