US stocks slump following disappointing earnings
NEW YORK (AP) - Stocks sagged Wednesday as investors assessed weak earnings reports from several U.S. companies.
Health care stocks had some of the biggest declines. Laboratory Corporation of America slumped after cutting its full-year earnings forecast. Quest Diagnostics, a major competitor, also dropped.
The broader stock market also fell. The Standard & Poor's 500 index has fallen six out of eight days in December, leaving it down 1 percent for the month.
The market may be succumbing to "buyer's fatigue" after a big rally this year, said Chris Bertelsen, chief investment officer at Global Financial Private Capital. The S&P 500 has surged 25 percent so far in 2013, putting it on track for its biggest annual increase in a decade.
"Anybody who thinks that it's up forever is certainly a neophyte to this business," said Bertelsen.
Investors also weighed a budget deal out of Washington.
Congress reached a modest U.S. budget agreement that restores about $63 billion in across-the-board spending cuts. The deal comes after lawmakers failed to reach an agreement in October. The gridlock led to parts of the government shutting down for 16 days, crimping economic growth and hurting consumer confidence.
In the long run, the deal should be good for the stock market because it will allow investors to focus on the economy and the outlook for corporations, rather than having to worry about politics, said Peter Sidoti, a former Wall Street analyst who now runs a company that focuses on analyzing small-company stocks.
"It just gets rid of the noise," said Sidoti, CEO of Sidoti & Co. "The less distractions that you have and the more that you have people focus on running their businesses, the better off we are."
The S&P 500 index fell 15 points, or 0.8 percent, to 1,787 as of 12:30 p.m. Eastern time. The Dow Jones industrial average dropped 100 points, or 0.6 percent, to 15,872. The Nasdaq composite fell 41 points, or 1 percent, to 4,019.
Health care stocks slid 1.4 percent. Laboratory Corporation of America plunged $9.63, or 9.7 percent, to $89.50, making the company the biggest decliner in the S&P 500. Quest Diagnostics fell $2.71, or 4.6 percent, to $53.53.
Investors are also watching to see when Fed policy makers will reduce their economic stimulus now that the economy appears to be strengthening. The Fed has its next policy meeting on Tuesday and Wednesday of next week.
In government bond trading, the yield on the 10-year Treasury note rose to 2.82 percent from 2.80 percent on Tuesday.
In commodities trading, the price of oil fell 76 cents, or 0.8 percent, to $97.65 a barrel. Gold fell $1.90, or 0.1 percent, to $1,259.40 an ounce.
Among other stocks making big moves:
_ Joy Global, fell $2.68, or 4.7 percent, to $53.52. The maker of mining equipment sank after posting earnings that fell short of analysts' forecasts.
_ Scripps Networks Interactive jumped $5.53, or 7.4 percent, to $80.78 after the media company said late Tuesday that the board of Discovery Communications discussed a possible bid for it.
_ MasterCard rose $31.17, or 4.1 percent, to $794.40 after announcing a 10-for-1 stock split. The company also raised its dividend and launched a $3.5 billion stock buyback program.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)