U.S. stocks fell, with the Standard & Poor’s 500 Index heading for its first weekly decline in more than a month, as investors weighed corporate earnings before a report on consumer confidence.
“People are digesting what’s going on with earnings,” Kully Samra, who manages U.K. clients for Charles Schwab Corp., which has $2.1 trillion globally, said by telephone. “Earnings have been mixed, although we don’t think that puts the longer-term story of the U.S. being in a good place at risk. It’s going to be a bumpy road.”
A report at 9:55 a.m. New York time may show consumer confidence slipped this month. The Thomson Reuters/University of Michigan index of consumer sentiment dropped to 84 from 84.1 in June, according to the median estimate of economists surveyed by Bloomberg. The initial reading for the measure was 83.9.
Consumer prices in Japan excluding food rose 0.4 percent in June, more than economists estimated and the biggest jump since 2008, damping speculation the country will need to expand stimulus. China directed more than 1,400 companies in industries from steelmaking to papermaking to cut excess capacity by year-end.
The S&P 500 (SPX) is heading for a 4.8 percent advance this month, its biggest since January. The gauge fell in June, after seven successive months of gains, as investors examine economic data for clues on when the Federal Reserve will start to reduce its $85 billion of monthly bond purchases.
Support from central banks and better-than-estimated earnings have driven the S&P 500 up as much as 151 percent from its March 2009 low to record highs. The Fed has said economic data will determine the timing and pace of any reduction in its bond-buying.
The Fed will start trimming its purchases in September, according to a Bloomberg survey of economists. Fed Chairman Ben S. Bernanke said last week it is “way too early to make any judgment” as to whether policy makers will start tapering purchases in September. The Fed’s Open Market Committee next meets to review policy on July 30-31.
Investors are also watching company earnings reports. Of the 260 companies in the S&P 500 that have posted quarterly results so far, 73 percent have exceeded analysts’ estimates for profit and 57 percent have topped sales projections, data compiled by Bloomberg show.