Wall Street edges down after last week’s gain; Fed, ECB eyed

July 30, 2012

NEW YORK (Reuters) – Stocks edged down on Monday following their best two-day run this year as investors awaited announcements from central banks later in the week.

The Federal Reserve and the European Central Bank will both meet amid investor expectations of action to stimulate economic growth, but it was unclear what, if any, measures might be taken.

Hopes the central banks would move to revive sluggish growth pushed the Dow above 13,000 for the first time since early May last week, and the S&P 500 had its biggest two-day rally since December.

But the major indexes erased gains in midday trade on Monday. Utilities and telecom services stocks were still up, while the biggest decliners were the consumer discretionary and healthcare sectors.

“People have had smoke signals from Europe for the last few days, so they’ve been forming opinions on whether there’s going to be some concrete activity, and the market’s had time to build that in,” said Joseph Benanti, managing director of Rosenblatt Securities in New York.

“It rallied pretty well over the last few days, but now it’s time for the smokescreen from those signals to fade. We are looking at earnings as the driver for the day. There were lowered expectations, so earnings have come in okay, but a lot of the outlook is downbeat for Q4,” Benanti added.

S&P 500 companies set to report quarterly earnings on Monday include Anadarko Petroleum Corp and Eastman Chemical Co.

According to Thomson Reuters data through Friday, of the 280 companies in the S&P 500 that have reported earnings to date for Q2 2012, 67 percent have reported earnings above analyst expectations. The average over the past four quarters is 68 percent.

The Dow Jones industrial average was down 19.11 points, or 0.15 percent, at 13,056.55. The Standard & Poor’s 500 Index was down 3.11 points, or 0.22 percent, at 1,382.86. The Nasdaq Composite Index was down 13.65 points, or 0.46 percent, at 2,944.44.

There were still some bright spots, however, as blue chips like Wal-Mart Stores and AT&T hit new 52-week highs.

Wal-Mart was up 0.6 percent at $74.97 after hitting $75.24 earlier, and AT&T was up 1.3 percent at $37.61 after hitting $37.69.

Coca-Cola Co shares were 0.7 percent higher at $80.58.

In M&A news, Shaw Group surged 60.8 percent to $44.91 after the engineering company agreed to be acquired by Chicago Bridge & Iron Co for about $3 billion in cash and stock.

Also, diversified U.S. manufacturer Roper Industries Inc said it will buy privately held Sunquest Information Systems Inc, a provider of diagnostic and laboratory software services, for about $1.4 billion in cash, cheering investors who drove the stock up as much as 10 percent.

But Progenics Pharmaceuticals Inc plunged 43.6 percent to $6.09 and Salix Pharmaceuticals Ltd tumbled 11.8 percent to $46.90 after U.S. health regulators declined to approve wider use of their drug for opioid-induced constipation and asked for more data.

Apple Inc climbed 1.5 percent to $594.15. Jury selection is due to begin on Monday in the United States in a high stakes patent battle between the iPad maker and Samsung Electronics Co Ltd, the culmination of over a year of pretrial jousting with billions of dollars in the balance.

(Reporting By Angela Moon and Anna Louie Sussman)

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