U.S. stocks fluctuated,
even after the Standard & Poor’s 500 Index hit a record on Monday, as
investors weighed disappointing manufacturing data and earnings from companies
including Travelers Cos. and Netflix Inc.
Travelers fell 3.1
percent after posting the biggest quarterly decline since 2008 in a key measure
of the company’s value as higher interest rates pressured its bond
portfolio. Netflix Inc. dropped 5.8 percent amid slower-than-expected
subscriber gains.
Travelers, the
second-largest U.S. commercial insurer, dropped 3.1 percent to $82.78 for the
biggest retreat in the Dow. Book value, a measure of assets minus liabilities,
slipped to $66.65 per share from $68 three months earlier, the company said
today in a regulatory filing as it announced second-quarter results. The
decline was driven by a $1.77 billion drop in net unrealized gains in its $62.8
billion portfolio of fixed-maturity securities.
Netflix slumped 5.8
percent to $246.77 after saying it added 630,000 new U.S. customers for its Internet
TV service in the second quarter, fewer than the average analyst
projection of 700,000. The company forecast earnings of 30 cents to 56 cents a
share in the third quarter, while the average analyst estimate called for 43
cents. Netflix shares have surged 183 percent this year through
yesterday.
The S&P 500 closed
at a record high yesterday buoyed by remarks by Chairman Ben Bernanke stating
that the bond purchase program will remain in place with no set end point. The
index dropped as much as 5.8 percent after Bernanke signaled on May 22 that the
Fed could start scaling back bond purchases as soon as September. The Fed
stimulus has helped boost stocks, with the S&P 500 jumping as
much as 151 percent from its March 2009 low.
Six of 10 S&P 500
main industries fell, with health-care, consumer-staples and financial shares
retreating at least 0.3 percent to lead losses.
Investors have also been
analyzing data to determine the timing and pace of any stimulus reduction by
the Fed. Half of the economists in a July 18-22 Bloomberg survey expect the
central bank to announce in its September meeting a tapering of the pace of its
monthly bond buying from $85 billion to $65 billion. That’s up from 44 percent
in last month’s poll.