Earn­ings, oil prices weigh on stocks

Los Angeles Times - - COMPANY TOWN - As­so­ci­ated press

Tepid cor­po­rate re­sults and an­other drop in the price of crude oil pulled stocks mostly lower.

DuPont said the ris­ing dollar weighed on its re­sults in the first quar­ter as earn­ings and sales shrank. The chem­i­cal gi­ant also low­ered its fore­cast for full-year profit, and its stock fell $2.15, or 3%, to $70.69.

“It seems the mar­ket is in a hold­ing pat­tern as in­vestors are wait­ing to see just how much the dollar im­pacts cor­po­rate earn­ings,” said Rus­sell Price, Ameriprise Fi­nan­cial’s se­nior econ­o­mist. “So far, things are a bit bet­ter than ex­pected.”

The Stan­dard & Poor’s 500 in­dex fell 3.11 points, or 0.2%, to close at 2,097.29. The Dow Jones industrial av­er­age fell 85.34 points, or 0.5%, to 17,949.59 while the Nas­daq com­pos­ite gained 19.50 points, or 0.4%, to 5,014.10.

A strong dollar re­flects the rel­a­tive strength of the U.S. econ­omy, but for big com­pa­nies with cus­tomers around the world, a ris­ing dollar can mean trou­ble. It makes goods pro­duced in the U.S. more ex­pen­sive to for­eign cus­tomers and di­min­ishes the value of sales col­lected in for­eign cur­ren­cies when U.S. cor­po­ra­tions bring the money home.

The ris­ing dollar is a key rea­son an­a­lysts fore­cast that first-quar­ter earn­ings will fall 2.2%, ac­cord­ing to S&P Cap­i­tal IQ. They ex­pect sales to sink 1.8%.

Among a slew of other com­pa­nies re­port­ing re­sults Tues­day, Har­ley-David­son turned in quar­terly sales that fell short of an­a­lysts’ tar­gets. The maker of mo­tor­cy­cles also cut its full-year fore­cast for ship­ments, blam­ing price cuts by ri­vals as well as the strong dollar. The com­pany’s stock fell $6.05, or 10%, to $55.72.

Teva Phar­ma­ceu­ti­cals pro­posed buy­ing My­lan, an­other maker of generic drugs, for more than $40 bil­lion in cash and stock. The of­fer de­pends on My­lan drop­ping its pro­posed ac­qui­si­tion of drug maker Per­rigo. My­lan’s stock jumped $6.02, or 9%, to $74.07. Teva’s rose 87 cents, or 1%, to $64.16.

Crude oil fell $1.12 to close at $55.26 a bar­rel in New York. Brent crude, a bench­mark for in­ter­na­tional oils used by many U.S. re­finer­ies, lost $1.37 to close at $62.08 a bar­rel in Lon­don.

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