The S&P 500 Index fell 0.4 percent to 1,121.64 paring weekly advance to 1.8 percent. The Dow also fell 21.42 points or 0.2 percent to 10,653.56. The treasury yields also declined with the two-year rate falling below 0.5 percent, which is a first.
The unemployment rate is stagnant at 9.5 percent. Overall, employment fell by 131,000 as temporary jobs were reduced by the Census Bureau. In the S&P 500 index, JP Morgan Chase declined 2 percent to $ 40.44. IBM also dropped 0.8 percent to $ 130.14. EOG Resources fell 3.1 percent to $ 99.26. Harman International Industries Inc. dropped 12 percent to $ 29.88.
Companies witness fall
Registering its biggest drop since May 2009, the Washington Post plummeted 7.6 percent to $377.56. Its Kaplan unit may have a material adverse effect due to the proposed rules of the US Department of Education.
Activision Blizzard Inc. declined 6.5 percent to $10.99. The company that is the largest video game publisher estimates its sales in this quarter to be $ 725 million while analysis estimates $ 914.5 million sales on average.
Companies from Humana Inc to Allergan Inc claimed profit much greater than what average analysts estimated. Earnings beat estimates at more than three quarters as the S&P 500 advanced.
Kraft Foods Inc. rose 2.4 percent to $30.36. American International Group gained 2.6 percent to $ 40.93. Perkin Elmer Inc. climbed 11 percent to $22.29.
Data compiled by Bloomberg and S&P revealed that profit earned by 443 companies in the second quarter aggregated to $21.45 a share. “We’ve had a huge recovery in corporate profits mostly due to cost-cutting,” said Brian Lazorishak, senior analyst at Chase Investment Counsel Corp.
As forecasted by S & P, sales per share were estimated to total $235.54 this quarter. Sales have recovered less than 7 percent from the first quarter of 2009 where there was a three year low of $221.80 a share.
Slowing of Growth
In the first quarter, growth slowed to 2.4 percent from 3.7 percent at the last quarter of 2009. This triggered fears that the nation might be entering into another recession. In June, consumer spending reports pending home sales and factory orders, were all weaker than what economists presumed it would be.
Joseph E. Stiglitz, Nobel Prize winner, Economics, says, “The recovery is so weak that it is not strong enough to generate new jobs for the new entrants in the labor force, let alone to find jobs for the 15 million Americans who would like a job and can’t get one.”
This article was submitted by Rohit Arora, co-founder of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to