Broadcom, Aflac results drag Wall Street down

Dow Jones: 12,041.97 (+1.81) S&P 500: 1,304.03 (–3.56) Nasdaq: 2,750.16 (–1.03):MOST US stocks fell, with the Standard and Poor's 500 Index dropping from near its highest valuation since June, as earnings reports from companies including Broadcom and Aflac disappointed investors.

Broadcom slumped 5.6 per cent to $43.80 after the biggest maker of chips for television set-top boxes reported margins that missed analysts’ estimates.

Aflac the world’s largest seller of supplemental health insurance dropped 2.4 per cent to $57.10. Operating income, which excludes some investment results, was $1.33 a share in the fourth quarter, missing the average estimate of $1.35 from analysts.

Time Warner rose 8.6 per cent after profits beat projections.

The Dow Jones industrial average gained 1.81 points, or 0.02 per cent, to 12,041.97.

The S&P’s 500 Index dropped 3.56 points, or 0.27 per cent, to 1,304.03.

The Nasdaq Composite Index fell 1.03 points, or 0.04 per cent, to 2,750.16.

“You need to be somewhat sceptical at this stage,” said Michael Nasto, senior trader at US Global Investors, which manages about $3 billion in San Antonio.

“We’ve had a very sharp stock rally. It’s not surprising that we see the market moving either sideways or lower. There’s concern about geopolitical risks. There’s been improvement in both economic data and earnings. However, you’d need to see stronger figures to push stocks higher,” he said.

Oil prices at current levels will increase airline costs by more than this year’s projected earnings, threatening the industry’s return to profitability, the International Air Transport Association said.

Delta Air Lines retreated 3.7 per cent to $11.35.

AMR slumped 2.1 per cent to $7.03.

Genworth Financial declined 8.5 per cent to $12.76. The mortgage guarantor and life insurer swung to a fourth-quarter loss on $350 million in costs tied to backing home loans as fewer borrowers return to compliance.

Electronic Arts, the second- biggest US video-game maker, gained 16 per cent to $18.09. Third-quarter profit increased to 59 cents a share, excluding some items, exceeding the average 56 cent average estimate analysts in a survey. – (Bloomberg)