US STOCKS-Wall St falls on China data, earnings

Thu Jan 23, 2014 11:00am EST

* Netflix jumps after earnings

* Noble Corp falls, biggest loser in S&P on the day

* Transports rise, lifted by just a few components

* Indexes off: Dow 0.94 pct, S&P 0.89 pct, Nasdaq 0.90 pct

By Chuck Mikolajczak

NEW YORK, Jan 23 (Reuters) - U.S. stocks fell on Thursday, hurt by disappointing manufacturing data in China and a mixed bag of recent U.S. corporate earnings.

Investor sentiment was dented by a report on manufacturing in China which showed that a mild slowdown at the end of 2013 in the world's second-largest economy had continued into the new year.

That sparked selling in the popular S&P 500 E-mini futures, which carried into the cash market's open.

Financials and materials shares were the weakest of the S&P's sectors.

"The China data continues to be persistently weak, we don't view this as a one-off kind of number and we do view the PMI series as especially credible," said Jim Russell, senior equity strategist for U.S. Bank Wealth Management in Cincinnati.

McDonald's Corp reported weaker-than-expected revenue as fewer customers ate at its restaurants. Shares rebounded from earlier losses to climb 0.6 percent to $95.48.

Netflix Inc shares surged 17 percent to $392.34 as the best performer on the S&P 500. The world's largest video-streaming company said Wednesday it added more than 2.3 million U.S. customers in the fourth quarter.

Earnings are expected from 21 S&P 500 companies on Thursday, including Microsoft Corp and Starbucks Corp after the close.

Thomson Reuters data through Thursday morning shows earnings for the fourth quarter are expected to grow 7 percent. Of the 102 companies in the benchmark that have reported, 63 percent beat expectations, in line with the long-term average.

"This is probably a market that is going to reward individual company, strong fundamental trends as opposed that rising tide lifting all boats as it did in 2013," said Russell.

The Dow Jones industrial average fell 154.22 points, or 0.94 percent, to 16,219.12, the S&P 500 lost 16.42 points, or 0.89 percent, to 1,828.44 and the Nasdaq Composite dropped 38.184 points, or 0.9 percent, to 4,204.816.

Offshore drilling contractor Noble Corp slumped 7.1 percent to $33.67 as the worst performer on the S&P 500 after saying Wednesday that rig utilization was expected to drop this year.

Shares of Herbalife fell nearly 11 percent to $65.60 in heavy volume after Massachusetts Senator Edward Markey asked for more information about its business practices. The nutrition company has been accused by prominent hedge fund manager William Ackman of running a pyramid scheme.

Transportation stocks, a barometer of economic confidence, hit a record but later gave up those gains. The index was top-heavy on Thursday, with just four components in positive territory.

The sector was buoyed by Union Pacific Corp and Gatx Corp. UNP gained 3.5 percent to $174.35 after it reported a bigger quarterly profit, while Gatx jumped 10.5 percent to $57.27 after posting earnings, announcing a $250 million buyback plan and boosting its quarterly dividend.

The Dow transports were up 0.1 percent.