Wall Street dips as telecoms slump; AmEx surges

Sharp drop in telecoms is offset by gains in healthcare

US stocks ended a choppy session on Thursday with a slight decline as investors digested the latest round of earnings, with a sharp drop in telecoms offset by gains in healthcare.

Telecoms  were down two per cent, their biggest percentage decline in five weeks, as Verizon lost 2.5 per cent.

The company added fewer than expected wireless subscribers in the third quarter and revenue fell short of expectations.

The sector was also pressured late in the session as AT&T extended earlier losses after a report the company had discussed the idea of a merger with Time Warner during recent meetings. AT&T shares ended down 1.9 per cent while Time Warner advanced 4.7 per cent.

 

But a 10.3 per cent jump in American Express helped offset the decline after the credit card issuer posted strong quarterly results and boosted its 2016 forecast. The gains gave the stock its best day in over seven years.

"The fact is there is a lot of positive feelings, at least in the short term, because the earnings season is going so well, the financials particularly," said J J Kinahan, chief market strategist at T D Ameritrade in Chicago.

"That being said, this is on really low expectations."

Despite the big gain in AmEx shares, the financial sector <.SPSY> closed down slightly, off 0.02 per cent as property and casualty insurer Travelers dropped 6.1 per cent after reporting a steep drop in profit.

The Dow Jones industrial average <.DJI> fell 40.27 points, or 0.22 per cent, to 18,162.35, the S&P 500 <.SPX> lost 2.95 points, or 0.14 per cent, to 2,141.34 and the Nasdaq Composite <.IXIC> dropped 4.58 points, or 0.09 per cent, to 5,241.83.

The S&P 500 has struggled in recent sessions to climb above its technical resistance level at the 100-day moving average, which currently stands at 2,142.60. The level had acted as support for the index until it broke below it last week.

Healthcare <.SPXHC>, up 0.5 per cent, was the sole major sector in positive territory, led by a 3.9 per cent climb in Danaher after its quarterly results.

After the closing bell, Microsoft Corp shares jumped 5.9 per cent after the software giant announced its quarterly results, while shares of Advanced Micro Devices fell 4.6 per cent following its results.

Declining issues outnumbered advancing ones on the NYSE by a 1.37-to-1 ratio; on Nasdaq, a 1.16-to-1 ratio favored decliners.

The S&P 500 posted six new 52-week highs and 4 new lows; the Nasdaq Composite recorded 57 new highs and 59 new lows.

About 6.19 billion shares changed hands in US exchanges, compared with the 6.42 billion daily average over the last 20 sessions.