U.S. stocks little changed as market takes breather; Boeing weighs on Dow

By Angela Moon

NEW YORK (Reuters) - U.S. stocks were little changed on Friday as the market took a breather after ending at record highs, and as investors digested strong earnings reports from JPMorgan Chase and Wells Fargo but a lowered profit outlook from United Parcel Service.

Weighing heavily on the Dow index, Boeing shares fell 4.4 percent to $101.15 after a Dreamliner operated by Ethiopian Airlines caught fire at Britain's Heathrow airport on Friday. Boeing accounted for 40 points of negative drag on the Dow industrials.

Dreamliner component manufacturers were also lower, including Honeywell International , off 0.5 percent, and Spirit Aerosystems , down more than 2 percent.

 

But the market was largely unchanged after both the Dow industrials and the S&P 500 reached all-time highs Thursday on reassurance from Federal Reserve Chairman Ben Bernanke that the U.S. central bank will keep monetary policy loose for some time.

Over the past three weeks, the benchmark S&P 500 has erased the nearly 6 percent selloff triggered by the Fed chairman in late May, when Bernanke first raised the prospect of trimming the central bank's $85 billion in monthly bond purchases.

"The momentum has been incredibly strong ... At some point a breather or some sort of consolidation makes sense," said Joe Bell, senior equity strategist at Schaeffer's Investment Research in Cincinnati, Ohio.

The S&P 500 rose 3.8 percent over the previous six sessions, its best six-day run since early January and longest winning streak since early March. The benchmark index was on track for a third consecutive week of gains.

Financials were outperforming the broader market. Shares of Wells Fargo & Co , the biggest U.S. mortgage lender, jumped 1.6 percent to $42.58 after posting quarterly results that topped expectations.

JPMorgan Chase & Co , the largest U.S. bank by assets, reported a 31 percent jump in quarterly profits. The stock was down 0.3 percent at $54.97 in late trading after trading higher for most of the day.

But United Parcel Service weighed on industrials and was the biggest loser in the S&P 500, sliding 6.4 percent to $85.63, after the world's No.1 package delivery company said second-quarter profit would fall short of expectations. Rival FedEx Corp fell 2.2 percent to $102.07.

The S&P 500 industrial sector index fell 0.9 percent.

U.S.-listed shares of Infosys jumped 5.1 percent to $46.30 after the company reported quarterly results and maintained its revenue growth forecast.

Analysts expect S&P 500 companies' second-quarter earnings to have grown 2.8 percent from a year earlier, with revenue up 1.5 percent, data from Thomson Reuters showed.

"The fact that we've had strong price action in the first week of earnings is a good sign. Historically speaking, the first five days after Alcoa has pretty much set the tone for the rest of that earnings season," Bell said. Alcoa reported earnings on Monday.

In economic data, the Thomson Reuters/University of Michigan's preliminary reading for July on the consumer sentiment index was 83.9, down from 84.1 in June and shy of forecasts for 85.

(Reporting by Angela Moon; Editing by Nick Zieminski)