Wall Street down after six-day rally

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WallStreet1234 Reuters. A Wall Street sign is pictured outside the New York Stock Exchange in New York.

New York - US stocks edged lower on Wednesday as weakness in AT&T and biotech names inspired investors to take profits following six straight days of gains, though a rally in Boeing limited losses.

AT&T Inc fell 3.4 percent to $35.07 a day after the Dow component reported adjusted earnings that beat expectations by a penny, though that was offset by weak service revenue growth.

Verizon Communications fell 1.1 percent to $47.41 while the S&P telecom sector dropped 1.8 percent, by far the worst-performing sector on the day.

Biotech shares fell a day after Amgen Inc reported earnings that were below forecasts.

The stock fell 6 percent to $112.16 and the Nasdaq biotech index lost 1.4 percent.

Biogen Idec Inc fell 1.8 percent to $300.73 despite a strong outlook.

Gilead Sciences Inc late Tuesday posted a sharp profit increase, sending shares up 2.9 percent to $74.95.

While the biotech results were mixed, they did point to some fundamental strength in the group, easing concerns it was overvalued.

“Earnings season has been better than expected, but revenue growth has been static, which is concerning because of its implications for margins,” said Michael Mullaney, who oversees about $11 billion as chief investment officer at Fiduciary Trust Co in Boston.

“If margins are going to stay at record levels, we'll need revenue acceleration. Otherwise we may not see upside surprises going forward.”

Boeing Co reported first-quarter revenue that beat expectations and lifted its core earnings forecast to reflect a tax settlement gain, sending shares up 2 percent to $130.15.

The Dow Jones industrial average was down 18.98 points, or 0.11 percent, at 16,495.39.

The Standard & Poor's 500 Index was down 1.89 points, or 0.10 percent, at 1,877.66.

The Nasdaq Composite Index was down 19.09 points, or 0.46 percent, at 4,142.37.

Better-than-expected corporate earnings have boosted Wall Street lately, though companies have largely been beating reduced forecasts.

According to Thomson Reuters data, profits are seen rising 1.6 percent this quarter, down from the 6.5 percent growth rate estimated at the start of the year.

With 28 percent of the S&P 500 having reported results, 65.2 percent have topped expectations, according to Thomson Reuters data, above the long-term average of 63 percent.

On the revenue side, 53.6 percent have exceeded forecasts, below the 61 percent long-term average.

Procter & Gamble Co's earnings topped analyst forecasts but revenues were flat and shares edged 0.8 percent lower to $79.93.

New home sales dropped 14.5 percent in March, tumbling more than expected to an eight-month low.

Housing stocks fell 1 percent, with D.R. Horton Inc off 2.3 percent to $21.33. - Reuters



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