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Overnight Markets: Wall Street down ahead of earnings season

by Himanshu Singh on Jan 08, 2013 at 05:21

Overnight Markets: Wall Street down ahead of earnings season

Wall Street declined on Monday as investors looked forward to the corporate earnings season on Wednesday.

The Dow Jones industrial average dropped 51 points, or 0.38%, to 13,384. The Standard & Poor's 500 Index fell five points, or 0.31%, to 1,462. The Nasdaq Composite Index lost three points, or 0.09%, to 3,099.

Investors are expecting earnings to be only slightly better than the third-quarter's lacklustre results, and analysts' current estimates are down sharply from where they were in October. According to Thomson Reuters data, fourth-quarter earnings growth is expected to come in at 2.8%.

Financial sector suffered after a group of major US banks agreed to pay a total of $8.5 billion to end a government inquiry into faulty mortgage foreclosures.

In a separate case, Bank of America also announced roughly $11.6 billion of settlements with mortgage finance company Fannie Mae and a $1.8 billion sale of collection rights on home loans.

Bank of America shares lost 0.2% while Nationstar Mortgage Holdings jumped 16.8%. Citigroup shares were up 0.09%, and Wells Fargo shares fell 0.5%.

Other sectors also declined, most notably energy and utilities. Aluminum company Alcoa begins the reporting season by announcing its results after Tuesday's market close. Alcoa shares fell 1.7%.

Shares of U.S. jet maker Boeing Co dropped 2% after a Boeing 787 Dreamliner aircraft with no passengers on board caught fire at Boston's Logan International Airport on Monday morning.

Amazon.com shares hit their highest price ever at $269.22 after Morgan Stanley raised is rating on the stock. Shares were up 3.6%.

Video-streaming service Netflix Inc shares gained 3.4% after it said it will carry previous seasons of some popular shows produced by Time Warner's Warner Bros Television.

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