Stocks Drop on Disappointing Earnings
U.S. stocks declined on Tuesday morning, amid disappointing results at United Parcel Service Inc. and after Moody’s Investors Service’s cut the outlook on Germany’s rating. Dow Jones Industrial Average lately lost 81.36 points, or 0.64%, to trade at 12,640.10. The S&P 500 fell 8.15 points, or 0.60%, to 1,342.37. The Nasdaq Composite was off 11.30 points, or 0.39%, at 2,878.85.
UPS (UPS), the largest package-delivery company and an economic bellwether, slumped 3.7 percent as it cut its forecast after a drop in international package sales dragged quarterly profit below estimates. Whirlpool Corp. (WHR) lost 4.6 percent as the home appliance maker reported earnings that trailed forecasts. DeVry Inc., a provider of education services, tumbled 26 percent after saying it plans to cut 570 jobs amid declining enrollment.
Wal-Mart Stores Inc. is urging retailers to reject a proposed $6 billion settlement that Visa Inc., MasterCard Inc. and major banks have agreed to pay retailers for alleged fee fixing. Under the settlement, stores will be allowed to charge customers more if they pay with a credit card.
AT&T is seeing declining smartphone sales, leading to the best profitability ever in its wireless arm as it saves on phone subsidies. The largest telecommunications company in the U.S. says it activated 5.1 million smartphones in its latest quarter, down from 5.5 million in the same period a year ago.
Marlboro maker Altria Group Inc. said Tuesday that its net income nearly tripled in second-quarter as higher prices helped offset flat cigarette volumes compared with a year ago when its results were depressed by a big charge. It reported net income of $1.23 billion, or 60 cents per share, for the three-month period ended June 30, compared with $444 million, or 21 cents a share, a year earlier when the company also recorded charges related to lease transactions.