Weak earnings reports weigh on US stocks

US stocks closed mostly lower yesterday after investors found little to like in weak corporate earnings reports and news of only tepid growth in the US economy in the third quarter. The Dow Jones industrial average managed a gain of 3.53 points to close at 13,107.21 after spending much of the day in the red.

The Standard & Poor’s 500 index fell 1.03 points to 1,411.94 and the Nasdaq composite rose 1.83 points to 2,987.95. Stocks rose in the morning before a mild midday sell-off, then recovered somewhat in the afternoon. The morning gains came after the Commerce Department estimated that the US economy expanded at a two per cent annual rate from July through September.

That was better than the previous quarter, and better than analysts expected, but not strong enough to bring down the unemployment rate. Even with yesterday’s rise, stocks lost ground this week, inflecting a sort of death-by-a-thousand-cuts on the rally that began in September. The Dow was down 236.30 points for the week, or 1.8 per cent. The S&P has fallen 21.25 points, or 1.5 per cent.

Goodyear Tire & Rubber sank ten per cent after a steep dropoff in sales in Europe delivered a blow to its earnings. The stock fell US$1.28 to US$11.02. Amazon rose US$15.32, or seven per cent, to US$238.24 despite a smaller-than-expected quarterly profit and a prediction for smaller-than-expected holiday revenue. The yield on the ten-year Treasury note fell to 1.75 per cent from 1.82 per cent on Thursday.