US stocks dropped modest, pressured by disappointing results from major multinational companies, which offset optimism triggered by the recent decision by the European Central bank to buy bonds and boost growth in the euro zone.
On Thursday, Wall Street jumped with the S&P 500 and Nasdaq returning to a positive territory for the year after the ECB detailed a larger-than-expected bond-buying program to lift the region from sagging economy and deflation of flight.
According to Reuters, United Parcel Service Inc gave a Q4 earnings outlook that was below estimates, citing the disappointing performance from the US domestic ground shipments. Shares dropped $103.08 by 9.8% while FedEx Corp, which affirmed outlook on Friday, dropped 2.2% to $177.40.
McDonald’s Corp reported a drop in Q4 comparable sales, even though the decline was narrower than estimated. General Electric Co. reported low sales in its gas and oil unit, with a climb in overall earnings.
Chief market strategist of Naxitis Global Asset Management, David Lafferty said, “Earnings have been a bit mixed this quarter. We’re not expecting a lot of multiple expansion. Valuations in the US market are only okay, and you have to make sure you’re factoring in the impact from currencies, which will really be a headwind for multinationals.”
Kevin Caron of Stifel Nicolaus & Co. was quoted by Bloomberg as having said, “The bigger picture is that we had a pretty sizable move in the market the day before. The market is still assessing the recent actions by the ECB, trying to figure out how much of that action was already priced into markets going into the meeting and what it might mean for markets going forward.”
For the week, the Dow is up 1.4%, the Nasdaq is up 2.5% and the S&P 500 is up 1.9%.
The Dow Jones Industrial Average dropped 0.32% or 56.65 points to 17,757.33 while the S&P 500 lost 0.28% or 5.82 points to 2,057.33. The Nasdaq Composite gained 0.04% or 2.12 points to 4,752.51.
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