Wall Street’s weeklong rally ended Monday after Citigroup Inc.’s second-quarter profit missed analyst forecasts, raising questions about other companies’ quarterly earnings.
The Dow Jones Industrial Average fell 65.84, or 0.6 percent, to 10,574.99. The Standard & Poor’s 500 Index fell 6.79, or 0.6 percent, to 1,221.13. The Nasdaq Composite Index fell 11.91, or 0.6 percent, to 2,144.87.
With two weeks of earnings reports ahead, Citigroup’s earnings results reversed some of the optimism that kept stocks moving higher last week. Citigroup said challenging market conditions, especially in its fixed-income trading, left its earnings and revenue below Wall Street’s average estimates.
Among local movers, shares of Intermix Media Inc. gained 9.5 percent to $11.74 after News Corp. agreed to buy the L.A.-based owner of the social-networking site MySpace.com for $580 million in cash to expand its Internet offerings. News Corp. said it will pay $12 a share, a 12 percent premium over Intermix’s closing price on Friday. The deal is the first investment by News Corp.’s newly formed Internet business unit Fox Interactive Media.
And Napster Inc. rose 6.3 percent to $4.24 after the L.A.-based digital music service announced that it has increased the number of MP3 players and devices compatible with its Napster To Go portable subscription music service to over 25.
On the down side, shares of Mattel Inc. sank 4.4 percent to $18.59 after the El Segundo-based toymaker posted a second-quarter loss due to a large tax expense related to the repatriation of foreign profits and high oil prices that cut into margins, causing it to miss analysts’ average forecast for earnings. Mattel reported a loss of $94 million (23 cents per diluted share) for the second quarter ended June 30.
And First Consulting Group Inc. lost 4.2 percent to $5 after the stock rating of Long Beach-based consultant to hospitals and pharmaceutical companies was cut to “market perform” from “market outperform” by analyst P. Sean Jackson at Avondale
Partners LLC.
