The Standard & Poor’s 500 Index reached a new year low Wednesday, losing 1.3% to dip under 1,238 despite a strong earnings season. While more than 70% of companies reporting earnings have beaten estimates, forecasts for the future are not as promising. The economic outlook is negative after the United States reached a new debt ceiling agreement this week, and a drop in factory orders was the latest bad news this week.
Leading the S&P south was RR Donnelley & Sons (NYSE:RRD), shedding about 10% in price to under $16 a share, a loss of more than $2. A downgrade today and disappointing earnings have RRD down about 7% for the week.
CenturyLink (NYSE:CTL) was down more than $1.60 a share to beneath $35, a drop of more than 5% in early trading thanks to disappointing earnings. For the month, the tech company is down about 10%. CenturyLink is now down double digits below its 20-, 50- and 200-day moving averages.
Frontier Communications (NYSE:FTR) also was off more than 5% in early buying and selling as poor earnings had traders taking the communications company down to about $7 per share, more than a 40-cent drop. For the week, Frontier Communications is down more than 10%. It has a relative strength index rating of 23.34, with 30 considered the floor for when a stock is viewed as being oversold.
Leading the S&P gainers for the morning session was Quanta Services (NYSE:PWR), boasting pleasantly surprising earnings that led the stock north by more than $1.40 per share, about 9% higher to over $18.80. For the week, the industrial goods company is down more than 12% and more than 16% lower for the month.
Mastercard (NYSE:MA) was up more than 20 points to over $324, about a 7% pickup as its second-quarter numbers pleased investors. Mastercard, which reported 33% profits for Q2, is trading at a record high.
XL Group (NYSE:XL) was higher by about 6% in early trading as its earnings report had the insurer up above $21.50, increasing more than $1.20 a share, about a 6% gain. XL Group is down for the week, month and quarter while selling beneath its 20-, 50- and 200-day moving averages.
Jonathan Yates does not own any of the stocks mentioned in this article.
