US stocks retreat amid corporate earnings

U.S. stocks declined, after the Standard & Poor’s 500 Index closed at a record high yesterday, as Best Buy Co. tumbled and some earnings at companies such as Citigroup Inc. disappointed investors.

The S&P 500 lost 0.1% to 1,845.89 at 4 p.m. in New York, dragging the gauge lower for the year. The Dow Jones Industrial Average fell 64.93 points, or 0.4%, to 16,417.01. The Nasdaq Composite Index bucked the broader decline, gaining 3.80 points, or 0.1%, to 4218.69. About 6.3 billion shares changed hands on U.S. exchanges, 4.4% above the 30-day average.

“It’s not going to be a straight road up like what we saw in 2013,” Robert Pavlik, chief market strategist at Banyan Partners LLC, which manages $4.5 billion, said in a phone interview for Bloomberg. “A lot of what we saw in 2013 was predicated on money flowing into the market from the Fed. It’s going to be an upwards revision to earnings consensus this year that will push the market higher.”

“Investors are paying the closest attention to corporate results,” said to The Wall Street Journal, Jack Ablin, chief investment officer at BMO Private Bank. “As long as the economic news confirms growth, investors are going to file that away” to focus on earnings, he added.

Fewer Americans filed applications for unemployment benefits last week, a sign the labor market continues to strengthen. Jobless claims decreased by 2,000 to 326,000, the least since the end of November, from a revised 328,000 in the prior period, a Labor Department report showed on Thursday.

In corporate news, Citigroup slumped $2.39, or 4.3%, to $52.60, after reporting results that missed analyst estimates amid continued weakness in mortgages and fixed-income trading.

Goldman Sachs declined 2% to $175.17 even as results beat analysts’ estimates. Chief Executive Officer Lloyd C. Blankfein reported a fourth straight year of lower profitability than the firm achieved in the decade before the financial crisis. Goldman Sachs’s return on equity, a gauge of profitability, was 11% last year, and the company has struggled to reach 10% in the past three years.

Best Buy tumbled 10.74, or 29%, to 26.83, after reporting holiday revenue that was below year-earlier levels amid a decline in domestic same-store sales. Ahead of the results, Best Buy had lost 5.8% this month, after more than tripling in 2013.

Kroger Co. fell 4.9% to $37.35. The largest U.S. grocery chain is “particularly vulnerable” in the supermarket industry, where competition is rising and volume growth is weakening, analysts at Credit Suisse Group AG wrote in a note. They cut the stock’s rating to “neutral” from “outperform”.

J.C. Penney dropped 11 cents, or 1.6%, to 6.90, after the department-store chain said late Wednesday that it would shut 33 underperforming stores and eliminate 2,000 jobs, as part of its turnaround plan.