(Bloomberg) — U.S. stocks fell, after the biggest Standard & Poor’s 500 Index rally since April, as concern over geopolitical tensions kept investors on the sidelines before major companies report earnings.
Hasbro Inc. fell 2.5 percent after reporting revenue that missed analysts’ estimates. BB&T Corp. slid 3.6 percent as adjusted profit fell short of targets. Reynolds American Inc. dropped 1.7 percent after a jury ordered a unit of the company to pay a Florida woman $23 billion for her husband’s death from lung cancer. Halliburton Co. gained 1.5 percent after reporting that second-quarter revenue topped estimates.
The S&P 500 lost 0.4 percent to 1,970.82 at 9:45 a.m. in New York. The Dow Jones Industrial Average dropped 72.12 points, or 0.4 percent, to 17,028.06. Trading in S&P 500 stocks was in line with the 30-day average at this time of day.
“The geopolitical situation is an overarching damper on the market and underneath that this week we’re right in the heart of second quarter earnings,” Matthew Kaufler, manager of Federated Investor Inc.’s Clover Value Fund, said in an interview. “While the market is net focused on earnings, we’re still trying to keep a pulse on what’s going on around the world.”
A total of 10 S&P 500 companies are reporting earnings today, including Chipotle Mexican Grill Inc., Netflix Inc. and Botox-maker Allergan Inc. Some 140 companies in the gauge report this week.
The S&P 500 rallied 1 percent on July 18, rebounding from its biggest loss since April 10 that came after the downing of a Malaysian Airlines passenger jet in Ukraine and the Israeli ground invasion of the Gaza Strip.
European Union foreign ministers meeting in Brussels tomorrow will consider tougher sanctions on Russian individuals and companies as world leaders pressure Putin to do more to end the violence in eastern Ukraine.
In the Middle East, diplomatic efforts to end two weeks of Gaza Strip fighting intensified after battles killed dozens of Palestinians and 13 Israeli soldiers in the conflict’s bloodiest single day.
The S&P 500 ended last week up 0.5 percent, rallying on the final day after better-than-estimated sales at Google Inc., the world’s third-largest company, spurred a rebound in shares. The equities benchmark has advanced 7 percent this year through July 18 amid better-than-estimated corporate earnings and central bank stimulus as the U.S. economy shows signs of recovering from a 2.9 percent contraction in the first quarter.
The gauge closed at a record 1,985.44 on July 3 and trades at 18 times reported earnings, near the highest level in four years. The index has not had a drop of more than 10 percent since 2011.