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Stocks slip, declining for third consecutive day

By KEN SWEET

AP Business Writer NEW YORK (AP) - U.S. stocks were losing momentum in midday trading Monday, adding to a major sell-off last week that put caution back into the market. The losses were held in check by two pieces of positive news: a decent earnings report from Berkshire Hathaway and the announcement of a bailout package for a struggling Portuguese bank.

KEEPING SCORE: The Dow Jones industrial average fell nine points, or 0.1 percent, to 16,484 as of 12:15 p.m. Eastern. The Standard & Poor's 500 index was up a point, or 0.1 percent, to 1,926 and the Nasdaq composite was up 10 points, or 0.2 percent, to 4,362. Three stocks fell for every two that rose on the New York Stock Exchange.

PORTUGESE BANK RESCUE: Portugal's central bank said late Sunday it will rescue the ailing Banco Espirito Santo, one of the country's biggest financial institutions. The bank's woes were a major reason European markets fell last week. Portugal's PSI 20 index rose 1 percent on the news.

BUFFETT'S BIG PAYDAY: Warren Buffett's Berkshire Hathaway reported a profit of $6.4 billion last quarter, helped by its insurance division Geico, which performed well above Wall Street's expectations. Berkshire's investment portfolio was also a big driver of profits last quarter. The company's Class B stock rose $2.82, or 2 percent, to $128.65.

THE AFTERMATH: Investors are still dealing with last week's market rout, where the S&P 500 fell nearly 3 percent in five days. It was the worst week for the index since June 2012.

"There does appear to be a little caution in the markets," said Alpari analyst Craig Erlam. "Investors are a little concerned that the sell-off which started last week is not over and could lead to something much bigger."

Last week, investors had several reasons to sell. There was the escalating violence in Ukraine, Israel and Gaza, as well as concerns that the Federal Reserve was poised to start raising interest rates next year.

LIGHTS OFF: Utility stocks were among the hardest hit. Consolidated Edison and PG&E fell 1 percent while Duke Energy fell 2 percent. The Dow Jones utility index, which includes 15 utility stocks, fell nearly 2 percent.

OUT OF FASHION: Michael Kors dropped $5.86, or 7 percent, to $75.96. While the handbag and women's fashion company reported a rise in second quarter earnings, the company's profit margin shrank for the second consecutive quarter.

CURRENCIES, OIL: Currency markets were flat. The dollar was steady at 102.57 yen and the euro held at $1.3416. Benchmark U.S. crude for September delivery was up three cents at $97.91 per barrel. The yield on the 10-year Treasury note edged down to 2.48 percent from 2.50 percent on Friday.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

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