S&P retreats after eight days of gains as Coca-Cola drags

NEW YORK Tue Jul 16, 2013 5:09pm EDT

1 of 2. Traders work on the main trading floor of the New York Stock Exchange (NYSE) shortly after the opening bell in New York, May 20, 2013.

Credit: Reuters/Mike Segar

NEW YORK (Reuters) - The S&P 500 snapped its eight-day winning streak on Tuesday after disappointing sales from Coca-Cola, while investors turned cautious on the day before the Federal Reserve chairman's congressional testimony.

The market's pullback came a day after both the Dow and the S&P 500 ended at record closing highs for the third consecutive session.

Tuesday's volume was below average at 5.5 billion shares traded on exchanges, but above Monday's 4.91 billion, which was the lightest of any full trading day this year.

Eight of the 10 S&P 500 industry sector indexes declined, with materials shares among the day's worst performers.

Coca-Cola Co (KO.N) was the biggest drag in terms of points on the S&P 500 after the world's largest soft drinks maker reported weaker-than-expected second-quarter sales, which it blamed on economic malaise and unusually cold and wet weather. The stock, which was the Dow's biggest percentage loser, fell 1.9 percent to $40.23.

"I think you're going to see a lot of companies that are coming in just barely meeting their earnings expectations and again reporting reduced revenues, and I think that's the crux of the problem with our economy," said Brian Amidei, managing director at HighTower Advisors in Palm Desert, California.

Investors are eager to hear Federal Reserve Chairman Ben Bernanke's testimony about monetary policy on Wednesday before the House Financial Services Committee. His comments will be closely analyzed for signs of when the central bank may start reducing its stimulus efforts.

Bernanke's comments in late May, which raised the prospect of trimming the Fed's $85 billion in monthly stimulus, triggered a brief selloff and interrupted this year's rally. The S&P 500 is still up 17.5 percent since December 31.

The Dow Jones industrial average .DJI slipped 32.41 points, or 0.21 percent, to end at 15,451.85. The Standard & Poor's 500 Index .SPX declined 6.24 points, or 0.37 percent, to finish at 1,676.26. The Nasdaq Composite Index .IXIC fell 8.99 points, or 0.25 percent, to close at 3,598.50.

The day's economic data showed that U.S. consumer prices picked up in June. The overall U.S. Consumer Price Index increased 0.5 percent, the largest gain since February, after inching up 0.1 percent in May. U.S. homebuilder confidence rose in July to its strongest level in 7-1/2 years.

Financial stocks, which started the day as outperformers, also dropped despite strong earnings from Goldman Sachs (GS.N). The S&P financial sector index .SPSY fell 0.4 percent.

Goldman Sachs reported quarterly profit doubled as the bank made more money trading bonds before an interest-rate spike hit markets in June. But Goldman's stock slid 1.7 percent to $160.24 as investors fretted that the results could not be easily repeated.

In other earnings reports, Johnson & Johnson (JNJ.N) shares were flat at $90.40 after the Dow component reported higher-than-expected second-quarter earnings. Strong sales of prescription drugs and medical devices more than offset anemic growth of its consumer products, Johnson & Johnson said.

Analysts expect S&P 500 companies' second-quarter earnings to have grown 3 percent from a year earlier, with revenue up 1.5 percent, data from Thomson Reuters showed.

Shares of Tesla Motors Inc (TSLA.O) sank 14.3 percent to $109.05 after Goldman Sachs Group Inc set a new price target far below the stock's current trading price.

After the bell, shares of Yahoo (YHOO.O) slipped 2.7 percent to $26.15 following the release of its results. In Tuesday's regular session, Yahoo shares fell 1.7 percent to $26.88.

The day's volume was well below the average daily closing volume for the year of about 6.4 billion shares on the New York Stock Exchange, the Nasdaq and the NYSE MKT.

Decliners outpaced advancers on the New York Stock Exchange by a ratio of nearly 2 to 1. On the Nasdaq, about 14 stocks fell for every 11 that rose.

(Editing by Jan Paschal)

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Comments (3)
Mazzaschi wrote:
Check your stock ticker, mine does not show Cisco Systems to be rising.

Jul 16, 2013 10:15am EDT  --  Report as abuse
jrj906202 wrote:
Using same methods of inflation calculation,used in Jimmy Carter days,1980,shows current inflation is about 9%.So,you are losing 8% of your wealth,every year,if you keep it in a bank,paying 1%.It’s even worse,if you are paying tax on that 1% interest.

Jul 16, 2013 11:24am EDT  --  Report as abuse
TheInsomniac wrote:
jrj906202 – your grammatically poor, spacing and comma-conflicted screed is completely inaccurate. Inflation is currently nowhere near 9%, by any metric, and hasn’t been for a very, very long time.

Jul 16, 2013 5:46pm EDT  --  Report as abuse
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