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US stocks fall ahead of earnings season

Jan 08 2013 07:22 AFP


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New York - US stocks closed lower on Monday amid profit taking from last week's rally and caution on the eve of the start of corporate earnings season.

The Dow Jones Industrial Average shed 50.92 points at 13,384.29.

The broad-based S&P 500 fell 4.58 points to 1,461.89, while the tech-heavy Nasdaq Composite edged down 2.84 to 3,098.81.

Stocks gave back some of their gains from last week "amid some cautious afternoon trading preceding tomorrow's unofficial commencement of 4Q earnings season by Dow member Alcoa Inc's report after the closing bell," Charles Schwab & Co. analysts said.

Bank of America shares slipped 0.2% after it announced a comprehensive $11.6bn deal to settle longstanding claims on soured mortgages with Fannie Mae, as well as the sale of servicing rights on $306bn worth of mortgages.

Bank of America will pay Fannie Mae $3.6bn in cash and another $6.75bn to repurchase often dodgy mortgage loans it sold to the government-controlled Fannie Mae.

It will also pay another $1.3bn to settle additional Fannie claims on the servicing of mortgages.

Nationstar Mortgage, one of the buyers of the servicing rights, soared 16.9%.

US regulators separately announced that 10 banks, including Bank of America, will pay $8.5bn in cash and other assistance to borrowers hurt by their "deficient" practices.

Others included in that agreement were JPMorgan Chase and Citigroup, both up 0.1%.

On the Nasdaq, Apple fell 0.6% after announcing its App Store had a record-setting December, with two billion copies of mini-programs snatched up.

Online retail giant Amazon surged 3.6% after gaining an upgrade to "overweight" from Morgan Stanley.

Netflix, being challenged by Amazon in online video streaming, added 3.4% after it announced a deal to buy content from Warner Brothers Television.

Gene sequencing firm Illumina lost 7.1% after Roche Holding's chairman scotched expectations of a Roche takeover in an interview.

Bond prices were essentially flat, with the yield on the 10-year US Treasury steady at 1.91% from late Friday and the 30-year edging down to 3.10% from 3.11%. Bond prices and yields move inversely.



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