Stocks slide modestly after a mixed batch of earnings; ahead of European bank tests

Stocks dip on earnings, ahead of Euro bank tests

NEW YORK — Stocks are falling modestly as investors sorted through the latest batch of earnings and prepared for results from the European bank stress tests.

The latest round on Friday were more mixed than a day earlier when strong profit reports sent stocks sharply higher.

Microsoft, American Express and Ford all reported upbeat earnings, but Amazon and Kimberly-Clark disappointed.

The European bank stress test results could remove some uncertainty about how mounting government debt in many European countries could affect the continent’s financial sector.

The Dow Jones industrial average is down 32.02, or 0.3 percent, at 10,290.28. The Standard & Poor’s 500 index is down 5.04, or 0.5 percent, at 1,088.63, while the Nasdaq composite index is down 12.58, or 0.6 percent, at 2,233.31.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

NEW YORK (AP) — Stocks were set to extend gains Friday after more upbeat earnings lifted expectations that the economy is steadily improving.

Big moves were being held somewhat in check as investors worldwide await results from European bank stress tests. The tests could remove some uncertainty about how mounting government debt in many European countries could affect the financial sector. Debt problems have dragged down markets worldwide in recent months because there are worries high debt could slow a global economic recovery.

Microsoft Corp., American Express Co., Ford Motor Co. and McDonald’s Corp. all reported earnings that topped forecasts. More importantly, their results showed that businesses and consumers are increasing their spending as the economy recovers. Revenue growth is seen as vital this earnings season because it indicates companies are growing their businesses through more sales.

American Express said customers are spending close to pre-recession levels, a sign that shoppers are gaining some confidence in their personal finances. Ford’s sales jumped 28 percent in first half of the year, nearly double the pace of the industry.

Their earnings added to a string of results over the past couple of days that helped push the Dow Jones industrial average up more than 200 points Thursday. Investors have become more confident, for the moment, that upbeat quarterly results and outlooks from companies are a better gauge of future growth than the disappointing economic reports that have regularly been released in recent months.

Verizon Communications Inc. reported a more mixed picture. Its adjusted earnings topped forecasts and it attracted more wireless customers than its chief rival AT&T Inc. But, revenue fell below analysts’ forecasts, which tempered excitement.

Amazon.com Inc.’s profit disappointed, but not bad enough to keep futures from climbing. Amazon’s profit missed forecasts, but its sales and revenue picked up more than expected. A sharp rise in costs led to the missed forecast.

Ahead of the opening bell, Dow Jones industrial average futures rose 33, or 0.3 percent, to 10,300. Standard & Poor’s 500 index futures rose 5.10, or 0.5 percent, to 1,092.80, while Nasdaq 100 index futures rose 10.00, or 0.5 percent, to 1,862.75.

Microsoft shares rose 9 cents to $25.93 in pre-opening trading. Ford jumped 54 cents, or 4.5 percent, to $12.63. McDonald’s dropped $1.15 to $70.25 even after beating forecasts. Verizon rose $1.05, or 3.8 percent, to $28.05, while Amazon dropped $13.18, or 11 percent, to $106.89.

Stocks surged Thursday after a handful of strong results and forecasts were released before the market opened. Caterpillar Inc., 3M Co., UPS Inc. and AT&T Inc. all topped earnings forecasts and raised their outlooks for future profit.

Meanwhile, bond prices fell Friday as investors continued to favor stocks. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.99 percent from 2.94 percent late Thursday.

European markets were mixed ahead of the test results, which will come out after markets there close for the weekend. German shares soared, however, after a closely watched business climate index rose unexpectedly for the fifth straight month.

Germany’s DAX index rose 3.1 percent, Britain’s FTSE 100 dipped 0.3 percent, and France’s CAC-40 rose 0.6 percent. Japan’s Nikkei stock average jumped 2.3 percent.