U.S. Stocks Decline as Commodity Producers, Kimberly-Clark Drop

U.S. stocks fell, breaking a three- day winning streak for the Standard & Poor’s 500 Index, as lower commodity prices drove down energy and raw-material producers and Kimberly-Clark Corp. (KMB) cut its profit forecast.

Marathon Oil Corp. (MRO) and Nucor Corp. (NUE) slumped as the Thomson Reuters/Jefferies CRB Index of commodities slipped 0.2 percent, the first drop in four days. Kimberly-Clark, the maker of Scott toilet paper and Huggies diapers, declined 2.7 percent to lead losses by consumer companies that sell necessities. Yahoo! Inc. climbed 1.5 percent following a report that board members may consider offers or other ideas to improve the company.

The S&P 500 slipped 0.2 percent to 1,335.25 at 4 p.m. in New York. The Dow Jones Industrial Average declined 26.11 points, or 0.2 percent, to 12,479.88, retreating from the highest level since June 2008.

“There’s enough to be concerned and cautious about in the market, but at the end of the day, we will be driven by corporate earnings, which need to continue to perform,” said Eric Mintz, who helps oversee about $5 billion at Eagle Asset Management in St. Petersburg, Florida.

The S&P 500 rose last week to the highest level since Feb. 18 and the Dow climbed to an almost three-year high as earnings at companies from Apple Inc. (AAPL) to Morgan Stanley beat analyst estimates. S&P 500 profits are exceeding projections by 9.6 percent for the first quarter, according to data compiled by Bloomberg. The gauge has climbed 6.2 percent in 2011.

Lower Proportion

While total net income for the S&P 500 topped the average analyst projection for eight straight quarters through the end of 2010, the proportion of companies beating forecasts has fallen three straight quarters, the longest streak since 2000, according to data compiled by Bloomberg.

Marathon Oil lost 2.3 percent to $52.59. The largest refiner in the U.S. Midwest led energy shares to a 0.6 percent drop, the second-biggest decline among 10 S&P 500 industries. Schlumberger Ltd. (SLB), the world’s largest oilfield services provider, slipped 1.9 percent to $88.05.

A gauge of raw-materials producers fell 0.7 percent, the biggest loss among the 10 main S&P 500 industries. Nucor, the largest U.S. steelmaker by sales, retreated 2.3 percent to $45.10. DuPont Co., the third-biggest U.S. chemical maker, dropped 1.4 percent to $55.12 for the biggest loss in the Dow.

Copper futures fell the most in almost seven weeks on concern that demand will slow from the world’s biggest users, China, the U.S. and Japan. Copper for delivery in July fell 9.55 cents, or 2.2 percent, to $4.3235 a pound in New York.

Higher Costs

Kimberly-Clark fell 2.7 percent to $64.24 for the fourth- biggest decline in the S&P 500. The maker of Scott toilet paper and Huggies diapers cut the lower end of its 2011 profit forecast, citing increasing material costs.

“They probably weren’t able to get enough revenue growth to make up for the rising costs and that’s going to happen to other companies as well, although we haven’t really seen the expected negative impact on earnings so far,” said Stewart Beach, who oversees $1.1 billion as chief investment strategist at Old Second National Bank in Aurora, Illinois.

Earnings-per-share beat analysts’ estimates at 81 percent of the 124 companies in the S&P 500 that reported results since April 11, data compiled by Bloomberg show. Companies in the index have topped estimates for eight straight quarters, the longest streak since at least 2006, helping propel the gauge up as much as 99 percent from the bear-market bottom on March 9, 2009, Bloomberg data show.

IGT, Yahoo

International Game Technology (IGT) rose the most in the S&P 500, jumping 9.3 percent to $17.84 after reporting second-quarter profit excluding some items of 23 cents a share, topping the average analyst estimate of 21 cents.

Yahoo climbed 1.5 percent to $17.11. Several board members at the owner of most-visited U.S. Web portal are willing to consider offers or other ideas to improve the company, the Wall Street Journal reported April 22, citing sources it didn’t name. Yahoo’s board rejected a $31-a-share offer from Microsoft Corp. in 2008.

Polycom Inc. (PLCM) jumped 13 percent to $58.43. The largest independent maker of videoconference systems said first-quarter profit was 48 cents a share excluding some items, beating the 42-cent average estimate by analysts.

Motorola Mobility Holdings Inc. dropped 4 percent to $23.93 for the biggest decline in the S&P 500. The handset maker’s 12- month share-price estimate was cut to $34 from $39 by Simona Jankowski, an analyst at Goldman Sachs Group Inc.

To contact the reporter on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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