* Philly Fed, leading economic indicators miss estimates
* UnitedHealth profit falls, shares drop
* Initial claims roughly in-line with expectations
* Indexes off: Dow 0.29 pct, S&P 0.34 pct, Nasdaq 0.51 pct
By Chuck Mikolajczak
NEW YORK, April 18 U.S. stocks dipped on
Thursday after a batch of weaker-than-expected economic data
triggered more concerns about the global economy and put the S&P
500 on key a technical support level.
The Philadelphia Federal Reserve Bank said its business
activity index dropped to 1.3, from 2.0 the month before, shy of
economists' expectations for 3.0.
In addition, the Conference Board said its Leading Economic
Index dropped 0.1 percent, below the expected 0.1 percent
increase and the first drop in seven months.
The data represent the latest in a string of economic
reports that have pointed to a weakening in the global economy,
including disappointing growth in China, retail sales data last
week and payrolls data earlier in April.
The number of Americans filing new claims for unemployment
benefits increased 4,000 to a seasonally adjusted 352,000 last
week, slightly above the 350,000 estimate, which could further
temper fears of a major setback in the labor market recovery.
Equities have been whipsawed in the past three sessions,
with a 1 percent move in either direction in the S&P 500
each day this week, the first such streak of volatility for the
index since the start of February.
Worries about global demand have sparked selloffs in
commodities, which in turn have led to weakness in equities.
However, some equity investors continue to use any dips as a
Investors also grappled with the pace of earnings season
starting to pick up.
"You've got a weak market today based on the weak economic
data," said Ken Polcari, Director of the NYSE floor division at
O'Neil Securities in New York.
"And people are starting to be a little more sensitive to
what those earnings actually say - not only what those earnings
are because they are already here, but what they are saying
about the future."
UnitedHealth Group Inc lost 4 percent to $59.57 as
the biggest drag on the Dow after the largest U.S. health
insurer said its first-quarter profit had fallen.
But fellow Dow component Verizon Communications Inc
advanced 3.2 percent to $51.13 after the telephone company
posted a higher than expected quarterly profit, driven by
strength in its wireless business.
Morgan Stanley reported a stronger-than-expected
first-quarter profit of $958 million, compared with a
year-earlier loss of $119 million, as its wealth management
business grew, but shares lost 3.2 percent to $20.79.
The Dow Jones industrial average dropped 42.28
points, or 0.29 percent, to 14,576.31. The Standard & Poor's 500
Index dipped 5.30 points, or 0.34 percent, to 1,546.71.
The Nasdaq Composite Index lost 16.19 points, or 0.51
percent, to 3,188.48.
In another bearish signal, the S&P 500 briefly broke below
its 50-day moving average of around 1,543, while the small-cap
Russell 2000 index has been trading below its 50-day
moving average since Monday.
Volume has been heavier on selling days, as many investors
have been anticipating a pullback for some time after the strong
run to start the year and are quick to book profits.
"They rode it all the way up on no volume but when they
decide they want to take some money off the table, they are
going to be a little more aggressive," said Polcari.
Earnings are expected to be soft this quarter, but most
companies are forecast to beat earnings estimates that have been
reduced by analysts.
S&P 500 earnings are now expected to have risen 1.9 percent
in the first quarter, up from the 1.5 percent estimate at the
start of the month, based on actual results from 82 companies
and estimates for the rest, according to Thomson Reuters data
through Thursday morning.
Of the 82 companies that have reported earnings, 72 percent
have topped analyst expectations but only 43.9 percent have
beaten revenue forecasts.