* UPS shares fall after outlook, weighs on transports
* Windstream rallies; set to spin off assets into REIT
* Merck up as results beat expectations, but Pfizer slips
* Indexes: Dow flat, S&P off 0.1 pct, Nasdaq up 0.2 pct
(Updates to afternoon trading)
By Ryan Vlastelica
NEW YORK, July 29 U.S. stocks mostly fell on
Tuesday as a weak outlook from UPS weighed on sentiment and
pressured transportation stocks, though other corporate results
capped losses in equities.
United Parcel Service shares fell 3.1 percent to
$99.47 after the world's biggest courier company slashed its
earnings forecast for the year due to spending to boost
capacity. It also reported earnings that were below
Rival shipping company FedEx Corp was down 0.8
percent at $148.36. The Dow Jones Transportation index,
which is often viewed as a proxy for business activity, fell 0.7
percent. It is about 2.3 percent away from a record closing high
hit last week.
UPS is the latest bellwether name to disappoint in its
results, following Amazon.com Inc and Boeing Co
last week. Nonetheless, this earnings season has largely been a
positive for equities. With more than half the S&P 500 having
reported, almost 70 percent have topped earnings expectations,
according to Thomson Reuters data, well above the long-term
average of 63 percent. More than 63 percent have topped revenue
forecasts, above the long-term average of 61 percent.
"If we started to see more negative outlooks, that would be
a reason to pause, but so far this earnings season speaks to the
health of corporate America and suggests markets still have room
to run," said David Lebovitz, global market strategist at J.P.
Morgan Funds in New York.
Telecom stocks were by far the strongest of the
day, up 2.7 percent after Windstream Holdings filed to
spin off assets into a tax-efficient publicly-traded real estate
investment trust. The stock jumped 12.8 percent
to $11.88 in its busiest trading day on record. Frontier
Communications added 11.1 percent to $6.60.
The Dow Jones industrial average fell 28.61 points or
0.17 percent, to 16,953.98, the S&P 500 lost 4.13 points
or 0.21 percent, to 1,974.78 and the Nasdaq Composite
added 4.78 points or 0.11 percent, to 4,449.69.
The Nasdaq was boosted by biotechnology shares, with the
Nasdaq Biotech index up 1.4 percent.
Dow components Merck and Pfizer reported
better-than-expected results. Merck's new drugs offset declining
sales of ones facing generic competition and Pfizer was helped
by growing sales of its cancer medicines. Merck rose 1.7 percent
at $58.95 while Pfizer shed 0.9 percent to
Corning Inc dropped 9.8 percent to $19.90 after
reporting earnings that came in below estimates.
U.S. consumer confidence jumped in July to a high not seen
since October 2007 but single-family home prices fell 0.3
percent in May on a seasonally-adjusted basis, falling short of
The Federal Reserve began a two-day meeting on monetary
policy. The Fed could make subtle yet telling changes to its
policy statement due Wednesday, as it plans how and when to
eventually raise interest rates.
(Editing by Meredith Mazzilli)