U.S. Equities Little Changed as Mondelez Offsets Facebook, P&G

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U.S. stocks were little changed as better-than-estimated earnings from Mondelez International Inc. helped offset results that disappointed from Facebook Inc. and Procter & Gamble Co.

Facebook dropped 1.8 percent after second-quarter spending jumped 82 percent. P&G retreated 4 percent after forecasting sluggish sales and profit growth. Whole Foods Market Inc. tumbled 12 percent after cutting its sales forecast. Mondelez added 5 percent as quarterly profits beat estimates, and Western Digital Corp. jumped 10 percent.

The Standard & Poor’s 500 Index increased less than 1 point to 2,108.63 at 4 p.m. in New York, after falling as much as 0.6 percent. The gauge closed for a second session above its average price during the past 50 days. The Dow Jones Industrial Average lost 5.41 points to 17,745.98. The Nasdaq Composite Index rose 0.3 percent. About 6.5 billion shares traded hands on U.S. exchanges, in line with the three-month average.

“When you put the Fed, the economy and earnings season all together, you still get a sideways market,” said Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees $2 billion. “You’ve had a handful of stocks that have really moved the averages over the past couple weeks of earnings, and today is not an exception.”

A report today showed gross domestic product rose at a 2.3 percent annualized rate, and a revised 0.6 percent advance in the first quarter wiped out a previously reported contraction. Consumer spending grew more than projected. Separate data showed applications for unemployment benefits rose last week after reaching a four-decade low, consistent with a stronger labor market.

Fed Watch

The Federal Reserve yesterday appeared to move a step closer to raising interest rates after policy makers expressed satisfaction with an improvement in labor markets, keeping alive speculation borrowing costs may rise in September without being definitive about the timing.

Fed Chair Janet Yellen is guiding the central bank toward its first rate increase in almost a decade as the U.S. approaches full employment. She has said the Fed is likely to tighten policy this year should the economy continue to improve in line with her expectations. Economists have put the chance of a September increase at 50 percent.

More than 50 S&P 500 members posted financial results today. Nearly three-quarters of the 323 companies that have reported this season have beaten profit estimates while half topped sales projections. Analysts expect a 4 percent drop in second-quarter earnings, shallower than July 10 calls for a 6.4 percent fall.

Price Swings

The S&P 500 is up 2.2 percent in July, heading for its biggest monthly advance since February, after rallying 2 percent in the previous two sessions. The index declined in four of the last five weeks, and had lost 2.9 percent in the five sessions ending Monday as a Chinese equities rout spurred concern about the nation’s economic growth and some corporate earnings disappointed.

The Chicago Board Options Exchange Volatility Index fell 3 percent Thursday to 12.13, after tumbling 20 percent over the previous two days. The gauge, known as the VIX, is on course for its biggest monthly drop since February, down 33 percent.

Six of the S&P 500’s 10 main groups advanced, led by utilities and raw-materials, while energy and consumer staples declined the most.

Whole Foods Market’s 12 percent skid to its lowest since January 2012 put a dent in staples’ strongest monthly advance since November. The organic grocer posted disappointing quarterly results and cut its sales forecast, a sign the company is losing its edge in a market it helped pioneer.

P&G, Facebook

Procter & Gamble fell 4 percent, the most in more than two years. The world’s largest consumer-products maker forecast sluggish sales and profit growth this year.

Facebook’s 1.8 percent loss was a drag on technology shares, though the stock trimmed an earlier drop of more than 5 percent. The social media giant’s spending jump in the second quarter eroded margins. Still, the company posted sales that topped estimates. Qorvo Inc. plunged 14 percent after revenue guidance for next quarter fell short of analysts’ expectations.

Energy shares in the benchmark declined for the first time in three days. Ensco Plc slid 7.6 percent, and Range Resources Corp. tumbled 6.5 percent after its quarterly profit missed estimates. Marathon Petroleum Corp. and Valero Energy Corp. lost more than 2.7 percent. Oil erased an earlier gain to slip for the first time in three sessions, down 0.6 percent.

Varian Medical Systems Inc. paced health-care’s loss, falling 4.9 percent after reporting sales that fell short of analysts’ forecasts. Cardinal Health Inc. and McKesson Corp. decreased at least 1.2 percent after reporting results.

Mondelez Gains

Mondelez rose 5 percent to an all-time high. The maker of Oreo cookies and Triscuit crackers posted second-quarter profit that topped analysts’ estimates, helped by a push to cut costs and shift production overseas. The snack giant also increased its stock buyback plan by $6 billion.

Wynn Resorts Ltd. and Netflix Inc. rallied more than 4.1 percent to pace an increase in consumer discretionary shares. Wynn had its best gain since November 2011 after setting an opening date for its second casino in Macau. Amazon.com Inc. added 1.5 percent on its way to a record, and its strongest month since September 2010.

Raw-materials stocks in the benchmark gauge advanced as Air Products & Chemicals Inc. added 6.1 percent. The world’s largest supplier of hydrogen gained the most in 13 months after raising its full-year profit forecast as margins expanded. Westrock Co. increased 5.8 percent, while Sealed Air Corp. climbed 4.7 percent.

Western Digital’s biggest rally in three years helped to offset Facebook and Qorvo’s decline among tech shares. The hard-drive maker said it’s seeing early signs of a pickup in PC demand. Microsoft Corp. gained 1.3 percent, while Seagate Technology Plc and Qualcomm Inc. climbed at least 2 percent.

Utilities rose 0.7 percent on the way to their best month since October as bond yields retreated Thursday. The yield on the 10-year U.S. Treasury is headed for its biggest monthly slide since January. Declining yields make utilities’ dividend payout more attractive to investors.

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