Stocks Fell After Drop in Durable Goods Orders. Dow Laggards: BA, PFE, HD, AA, and BAC

Published on Wednesday, 28 July 2010 17:43 Written by Christopher Lynn

New York, July 28^th (TradersHuddle.com) – Stocks fell after an unexpected decline in durable goods orders and a report from the Federal Reserve showed that economic activity slowed in some areas.

The market struggled since the early going, as the Commerce Department reported an unexpected decline in the durable goods orders, affected by a drop in the volatile aircraft orders. Despite most of the companies reported positive results, it failed to spark a bid to, as investors focused on disappointing results from Boeing (NYSE:BA).

Boeing (NYSE:BA), the 2^nd largest commercial aircraft maker in the world, posted a profit of $1.06 per share, $0.05 better than consensus; revenues fell 9.2% year over year to $15.57 billion versus the $16.13 billion that was widely expected. The company also failed to raise its guidance, pushing its shares lower. Boeing led the Dow Jones Industrial Average lower, as shares slid 1.89% to $67.32.

The major benchmark indices succumbed to a broad selling effort in afternoon trading, as the market extended its losses after the release of the Fed’s beige book business survey, showed that economic activity has slowed in some areas.

Healthcare stocks fell 1.4% for the session, making it the worst performing sector, as weakness in managed care providers, despite a better than expected report from Aetna (NYSE:AET), weighed on the sector.

Pfizer (NYSE:PFE), the largest pharmaceutical company in the world, fell 1.77% to $15.00, posting the second biggest percentage decline in the blue chip index.

Financials shares were also among the weakest sectors, as Moody's lowered its outlook on Bank of America (NYSE:BAC) to Negative from Stable, citing lower government support for financial institutions with new regulations. The largest U.S. lender was the fifth worst Dow component, as shares fell 1.41% to $13.99.

Alcoa (NYSE:AA), the aluminum maker, was the fourth worst Dow component. Shares declined 1.52% to $11.04 a day after Fitch gave Alcoa's latest debt offering an investment-grade rating but said it's keeping its "negative" outlook for the company amid pressure on the aluminum market.

Treasuries were flat for most of the session, but a bid surfaced in the afternoon to take the yield on the benchmark 10-year Note back below 3.0%. The move came as stocks encountered increased selling and market participants digested results from an auction of 5-year Notes.

Crude oil prices fell 0.7% loss to $76.99 per barrel after they had been as low as $75.90 per barrel amid news that oil inventories increased by 7.31 million barrels, versus a draw of 1.73 million barrels that had been widely expected.

And Home Depot (NYSE:HD), the largest home improvement retailer, fell 1.75% to $28.08, posting the third biggest percentage decline in the blue chip index, continuing yesterday’s slide after consumer confidence unexpectedly fell to a 5-month low.