Wall Street inches lower on Russia sanctions; earnings curb drop
US stocks edged lower today in the wake of fresh US and European Union sanctions on Russia, but some stronger-than-expected earnings reports helped keep declines in check.
The US sanctions announced late Wednesday hit some of Russia's biggest firms while the EU sanctions were aimed at Russian companies that help destabilize Ukraine and will block new loans to Russia through two multilateral lenders. The Market Vectors Russia ETF dropped 3.9 percent.
As earnings season continues, Morgan Stanley shares advanced 1.3 percent to $32.91 after the bank's second-quarter earnings more than doubled, beating estimates.
Microsoft shares rose 2.9 percent to $45.34 after the company said it would cut up to 18,000 jobs, or about 14 percent of its workforce, resulting in pre-tax charges of $1.1 billion to $1.6 billion over the next four quarters.
Fellow Dow component UnitedHealth Group gained 2.1 percent to $85.57 after the largest US health insurer reported higher-than-expected revenue and raised its forecast.
The Dow Jones industrial average fell 11.43 points or 0.07 percent, to 17,126.77, the S&P 500 lost 2.95 points or 0.15 percent, to 1,978.62 and the Nasdaq Composite dropped 9.29 points or 0.21 percent, to 4,416.68.
Housing starts were well short of expectations in June, as groundbreaking declined 9.3 percent to a seasonally adjusted annual 893,000 million unit-pace, the lowest since September. The PHLX housing index lost 0.9 percent.
But initial jobless claims dropped 3,000 to a seasonally-adjusted 302,000 for the week ended July 12 versus expectations of 310,000.
Also on the positive side, factory activity in the US mid-Atlantic region grew at a faster pace than expected in July, climbing to 23.9 from the 17.8 in the prior month and well above the 16 estimate.
S&P 500 companies' profits are expected to grow 4.9 percent in the second quarter, down from the 8.4 percent growth forecast at the start of April. Revenue is seen up 3 percent.
The 66 companies in the S&P 500 that have reported earnings through this morning, 68.2 percent have topped Wall Street expectations, roughly in-line with the 67 percent rate for the past four quarters and above the 63 percent rate since 1994.