Created on Tuesday, 05 November 2013 Written by STEVE ROTHWELL, AP Markets Writer
NEW YORK (AP) — Disappointing corporate earnings kept the stock market in check on Tuesday, leaving indexes little changed in midday trading.
Tenet Healthcare plunged after the hospital operator issued a disappointing outlook for this quarter and said that its third-quarter profit fell, in part because of costs associated with a big acquisition. Delphi Automotive dropped after the company cut its earnings forecast for the year.
The market is still close to record levels after a surge that has put the Standard & Poor's 500 index on track for its best performance since 2009. Stocks have advanced this year as the Federal Reserve kept up its stimulus program to help the U.S. economy recover.
Investors are struggling, however, to find more catalysts to push the market higher. Company earnings may start to flag if economic growth remains in the doldrums, and investors already expect the Fed to keep up its stimulus until at least next year.
"We're going to run out of steam here," said Scott Wren, a senior equity strategist at Wells Fargo Advisors.
The S&P 500 index was down four points, or 0.2 percent, to 1,763 as of 2:19 p.m. Eastern time. The index is eight points below its record close of 1,771, set Oct. 29.
The Dow Jones industrial average was down 10 points, or 0.1 percent, to 15,628. The Nasdaq composite was up three, or 0.1 percent, at 3,940.
Overall, corporate earnings for the third quarter have been better than analysts had forecast.
Earnings for S&P 500 companies are expected to grow by 5.2 percent in the July-to-September period, according to S&P Capital IQ. That's quicker than the 4.9 percent growth recorded in the second quarter and the 2.4 percent growth in the same period a year ago.
Stocks could struggle to add to their gains, however, now that three-quarters of the S&P 500's earnings reports have been released, said Kristina Hooper, head of U.S. Capital Markets Research & Strategy at Allianz Global Investors. Investors may also be underestimating the impact that last month's 16-day partial government shutdown had on the economy, she said.
"What's concerning is what we're seeing for the fourth quarter," Hooper said. The forecasts companies are making "suggest that we could see some damage from the shutdown."
The overwhelming majority of earnings outlooks that companies have provided for the fourth quarter have been negative. Of the 78 companies that have provided investors with guidance, 60 have lowered their forecasts.
On Tuesday, Tenet dropped $6.60, or 12.6 percent, to $42.20. That decreased the stock's gain this year to 30 percent. Delphi fell $2.87, or 4.9 percent, to $55.17.
Investors are also waiting for the Labor Department's closely watched monthly jobs survey, which was delayed a week by the government shutdown. The report is due out Friday.
In government bond trading, the yield on the 10-year note climbed to 2.65 percent from 2.60 percent on Monday.
The yield rose after a private survey showed that hiring and sales increased in the U.S. services sector last month. They suggests the sector wasn't affected by the partial government shutdown. The report measures growth at companies that employ 90 percent of the workforce, including retail, construction, health care and financial services.
In the commodities markets, the price of oil fell $1.33, or 1.4 percent, to $93.27 a barrel. Gold edged down $5.60, or 0.4 percent, to $1,309.20 an ounce.
Among other stocks making big moves:
— CVS Caremark rose $1.66, or 2.7 percent, to $63.63 after its third-quarter income climbed 25 percent, beating Wall Street expectations. The drugstore operator and pharmacy benefits manager also raised its 2013 earnings forecast.
— Regeneron jumped $19.43, or 6.9 percent, to $301.13 after the pharmaceutical company posted earnings that beat analysts' expectations. The company also reported strong growth of its eye disease drug Eylea.