Wall St snaps six-day run; Apple to split stock

People walk past the New York Stock Exchange as it flies the US, French and Eurozone flags in New York, April 14, 2014. United States stocks dipped on Wednesday to snap a six-session winning streak as gains in Boeing and Gilead were offset by sl
People walk past the New York Stock Exchange as it flies the US, French and Eurozone flags in New York, April 14, 2014. United States stocks dipped on Wednesday to snap a six-session winning streak as gains in Boeing and Gilead were offset by slides in AT&T and the wider biotech sector. -- FILE PHOTO: REUTERS

NEW YORK (REUTERS) - United States (US) stocks dipped on Wednesday to snap a six-session winning streak as gains in Boeing and Gilead were offset by slides in AT&T and the wider biotech sector.

AT&T Inc fell 3.8 per cent to US$34.92 a day after the Dow component reported earnings that beat expectations, offset by weak service revenue growth. Verizon Communications shed 1 per cent to US$47.43 while the S&P telecom sector index dropped 2.2 per cent, easily making it the session's worst-performing sector.

Biotech shares pulled the Nasdaq lower. Amgen Inc slid 5 per cent to US$113.32, a day after earnings missed forecasts. The Nasdaq biotech index fell 1.5 per cent and NYSE Arca biotech index lost 1.6 per cent.

"You've got some big numbers coming out from companies that have already been pretty volatile in the Nasdaq, and there is some caution against the potential for shortfalls that could restart Nasdaq on the way down," said Mr Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

"This is traditionally not going to be a particularly strong time for earnings reports, and it's easy to take less inspiring numbers and say this market is overvalued or pass them by and say this is a seasonally low point. So it really is more about investors' own view of how high a multiple they are willing to pay."

There were bright spots within biotech. Gilead Sciences Inc rose 1.4 per cent to US$73.86 and Illumina Inc gained 3.9 per cent to US$153.69 after the companies posted results late Tuesday.

Boeing Co reported first-quarter revenue that beat expectations and lifted its core earnings forecast to reflect a tax settlement gain, sending its stock up 2.4 per cent to US$130.63 and giving the biggest boost to the Dow.

The Dow Jones industrial average fell 12.72 points or 0.08 per cent, to end at 16,501.65. The S&P 500 lost 4.16 points or 0.22 per cent, to 1,875.39. The Nasdaq Composite dropped 34.491 points or 0.83 per cent, to 4,126.967.

After the closing bell, Apple Inc jumped 7.3 per cent to US$563 after the iPhone maker reported quarterly results, approved a seven-for-one stock split and expanded its share-buyback authorization by US$30 billion (S$38 billion).

In another big move after the close, Facebook Inc gained 4.8 per cent to US$64.30. Its mobile advertising business continued to accelerate in the first three months of the year, helping the social networking company top Wall Street's revenue target.

Better-than-expected earnings have buoyed Wall Street lately, though companies have largely been beating reduced forecasts. Profits are seen rising 1.6 per cent this quarter, down from the 6.5 per cent growth rate estimated at the start of the year, according to Thomson Reuters data.

Of the 141 companies in the S&P 500 that had posted results through Wednesday morning, 65.2 per cent have topped expectations, above the long-term average of 63 per cent. On the revenue side, 53.6 per cent have exceeded forecasts, below the 61 per cent long-term average.

Procter & Gamble Co's earnings topped forecasts but sales were flat. The stock slipped 0.3 per cent to US$80.36.

New home sales tumbled more than expected to an eight-month low in March. The PHLX housing sector index fell 1.1 per cent, with D.R. Horton Inc off 2.2 per cent at US$21.35.

Volume was light, with about 5.67 billion shares traded on US exchanges, well below the 6.65 billion average so far this month, according to BATS Global Markets.

Declining stocks outnumbered advancing ones on the NYSE by 1,566 to 1,482, while on the Nasdaq, decliners beat advancers by 1,775 to 819.