MARKET REPORT

Stocks slip as traders await federal reports

NEW YORK -- The stock market fell modestly Tuesday as investors focused on a batch of big economic reports ahead.

The Standard & Poor's 500 index dropped 8.96 points, or 0.5 percent, to close at 1,969.95.

The Dow Jones industrial average fell 70.48 points, or 0.4 percent, to 16,912.11, while the Nasdaq composite slipped 2.21 points, less than 0.1 percent, to 4,442.70.

The government today will release its look at economic growth in the spring quarter, and the Federal Reserve finishes a two-day meeting. On Thursday, a report on China's manufacturing industry will give investors an update on the health of the world's factory floor.

For U.S. investors, the key news comes Friday, when the Labor Department releases its monthly report on the jobs market.

With traders cautious ahead of these reports, the market has drifted.

"So far, it seems like this week is about waiting for later this week," said Bill Stone, chief investment strategist at PNC Asset Management Group.

Stocks spent most of Tuesday wandering around the start line. Major indexes crept higher in the morning after news that a gauge of consumer confidence hit its highest level in nearly seven years. Major indexes turned flat by midday, then slid to a loss in the last hours of trading.

Telecoms were the only one of the 10 industry groups in the S&P 500 to rise as traders plowed into a range of telephone and cable stocks, including AT&T and Verizon. The moves came after Windstream Holdings announced plans to move some of its network into a trust that won't pay income tax. Windstream's stock jumped $1.30, or 12 percent, to $11.83.

This week marks the halfway point for second-quarter earnings, and the overall results look solid. Earnings are on track to climb 8.8 percent over last year. At the start of the earnings season, analysts predicted an increase of 6 percent.

Among the heavyweights turning in results Tuesday, Merck reported a large sale and a tax benefit that helped it more than double second-quarter earnings, easily topping Wall Street's expectations. The drugmaker also raised its profit forecast for 2014. Its stock climbed 61 cents, or 1 percent, to $58.58.

A warning of lower profits from United Parcel Service knocked its stock down. UPS said spending on technology to improve its service during the holiday season will take a cut out of its full-year earnings. The shipping company also said its second-quarter earnings fell 58 percent, though shipments and sales picked up. UPS sank $3.80, or 4 percent, to $98.86.

Even with the release of the earnings reports, traders are mostly biding their time until the economic news hits.

"In the next three days, we're going to get so much information on the state of the economy," said Jim Paulsen, chief investment strategist at Wells Capital Management. "It could change the landscape under our feet."

The price of oil fell on concerns about the strength of demand for oil and gasoline in the U.S., ahead of the weekly report on supplies from the Energy Department. Benchmark U.S. crude slipped 70 cents to $100.97 a barrel on the New York Mercantile Exchange.

Information for this article was contributed by Youkyung Lee of The Associated Press.

Business on 07/30/2014

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