Dell Inc. sank 7.2 percent after cutting this year’s profit forecast on shrinking personal-computer sales. Rival Hewlett- Packard Co. fell 2.4 percent ahead of its earnings report after the market’s close. PulteGroup Inc. jumped 4.2 percent after a report showed sales of existing homes climbed in July from an eight-month low. Sunrise Senior Living Inc. surged 60 percent after Health Care REIT Inc. said it will buy the company
The S&P 500 retreated 0.4 percent to 1,408.16 at 11:23 a.m. in New York. U.S. stocks fell yesterday as the benchmark index failed to remain above a four-year closing high of 1,419.04 reached in April. The Dow Jones Industrial Average dropped 63.88 points, or 0.5 percent, to 13,139.70 today.
“The market’s taking a little rest right now,” David Darst, the New York-based chief investment strategist at Morgan Stanley Smith Barney, said in a telephone interview. His firm has $1.7 trillion in client assets. “Investors need to see rhetoric and action in terms of monetary support. It doesn’t have to be dramatic but something that shows the Fed and the European Central Bank are watching. You want to see monetary talk and maybe monetary action.”
Fed Minutes
The Fed will publish today minutes of its two-day meeting that ended on Aug. 1, when policy makers declined to initiate a third round of monetary stimulus, a policy known as quantitative easing. The S&P 500 has rallied 10 percent since June 1 on speculation the central bank may signal more easing at the Kansas City Fed’s annual conference on Aug. 30 to Sept. 1 in Jackson Hole, Wyoming.
Stocks worldwide fell earlier after a report said Japan’s trade deficit was 517.4 billion yen ($6.5 billion) in July as Europe’s sovereign-debt crisis and a slowdown in China dragged down exports. That compares with the median forecast of a 270 billion yen deficit in a Bloomberg News survey of 28 analysts.
Federal Reserve Bank of Chicago President Charles Evans said today that a weakening in global trade is “awful.” The U.S. central bank will consider circumstances in the economy and financial stability to decide whether it needs to step up monetary easing, Evans said in Beijing.
‘Moderate Slowdown’
“We’re in a moderate slowdown everywhere in the world,” Joseph Veranth, chief investment officer at Dana Investment Advisors in Brookfield, Wisconsin, said by phone. The firm manages $3.7 billion. “There’s been a bit of the return of the inflation trade with the pick-up in commodities and the U.S. stock market. The real story there is it really takes the Fed off the table. Even though there’s some speculation of the Fed getting involved, we really don’t see it happening.”
Equities pared declines as European Economic and Monetary Affairs Commissioner Olli Rehn said he is less pessimistic on the euro outlook than he was in the spring. The central bank has a central role in ensuring the financial system’s stability, Rehn said in an e-mailed copy of a speech given in Helsinki today.
Luxembourg Prime Minister Jean-Claude Juncker, the head of the euro group of finance ministers, visits Greece today. Greek Prime Minister Antonis Samaras said before the meeting that his country needs “more air to breathe” in dealing with its debt crisis.
Greece Talks
German Chancellor Angela Merkel and French President Francois Hollande meet tomorrow to discuss the fiscal crisis, and both will talk separately with Greece’s Samaras later this week. Concessions are possible for Greece if the prime minister shows a willingness to meet the main targets set out in his country’s bailout program, a senior lawmaker with Merkel’s government said yesterday.
Dell fell 7.2 percent to $11.45 as the world’s third- largest maker of personal computers forecast third-quarter revenue that missed analysts’ estimates and cut its profit outlook by 20 percent. Competition from Apple Inc.’s iPad and an anemic global economic recovery is dragging down PC demand.
Hewlett-Packard lost 2.4 percent to $19.45 for the biggest decline in the Dow. The world’s biggest computer maker may report today after the close that sales during the third quarter ended July declined 3 percent to $30.1 billion, according to the average estimate from 25 analysts in a Bloomberg survey. Excluding some items, Hewlett-Packard earned 98 cents a share, down 11 percent from a year earlier, analysts forecast.
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