US stocks mostly lower on merger, earnings news

US stocks mostly lower on merger, earnings news

NEW YORK - US stocks Friday moved mostly lower following news that major tobacco companies entered merger talks and earnings from banking giant Wells Fargo that met expectations.

About 45 minutes into trade, the Dow Jones Industrial Average dropped 22.39 points (0.13 per cent) to 16,892.68.

The broad-based S&P 500 slipped 1.19 (0.06 per cent) to 1,963.49, while the tech-rich Nasdaq Composite Index rose 9.24 (0.21 per cent) to 4,405.45.

Reynolds American is in merger talks to buy Lorillard, the tobacco companies said. Lorillard, with a market valuation of $24 billion, rose 4.8 per cent. Reynolds fell 0.4 per cent.

Meanwhile, Wells Fargo kicked off second-quarter earnings among big banks with a report of per-share profit of $1.01, meeting analyst expectations. The result snapped a winning streak for Wells, which has typically beaten expectations. Shares dropped 0.9 per cent.

Online retail giant Amazon jumped 4.4 per cent after hosting a developers summit in New York on new technology that was enthusiastically reviewed by analysts. "Cloud services is one area where Amazon has an early-mover advantage," said Jefferies, which has a "buy" recommendation on the stock.

Gap declined 1.2 per cent as it said June comparable-store sales fell two per cent. The performance at the retailer's Old Navy chain was "stellar," but results were "softer" at its Gap and Banana Republic brands, the company said.

Fastenal, which sells industrial and construction supplies, fell 4.3 per cent afer earnings of 44 cents per share met expectations, but revenues of $949.94 million came in below the $952.45 million projected by analysts.

Bond prices rose. The yield on the 10-year US Treasury dipped to 2.52 per cent from 2.54 per cent Thursday, while the 30-year fell to 3.34 per cent from 3.37 per cent. Bond prices and yields move inversely.

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