US stock indexes fell unexpectedly amid earning reports

U.S. stocks indexes retreated, forming what seems to be a trend of slight drop, giving the Standard & Poor’s 500 Index its first-two day decline in a month, as investors weighed global manufacturing data and earnings reports from Caterpillar Inc. and Apple Inc.

The S&P 500 fell 0.4% to 1,685.94 at 4 p.m. in New York, after earlier advancing within 3 points of 1,700 for a third straight day. The Dow Jones Industrial Average lost 25.50 points, or 0.2%, to 15,542.24, retreating from a record close yesterday.

“The earnings are validating and supporting the market as opposed to pushing the market higher,” Mark Freeman, chief investment officer at Westwood Holdings Group Inc. in Dallas, said by telephone for Bloomberg. “It just speaks to how far we have come and the amount of positive expectations that have already been cleared by the market.”

The Fed stated economic data will determine the timing and pace of any reduction in its $85 billion in monthly asset purchases. A report yesterday showed sales of new U.S. homes jumped more than forecast in June to the highest level in five years. Separate data from London-based Markit Economics showed manufacturing indexes based on surveys of purchasing managers rose in the U.S. and Germany this month, while China’s manufacturing contracted more than economists estimated.

Investors have turned to corporate earnings, with 48 companies included in the S&P 500 are due to report today. Of the 169 companies in the benchmark index that have posted quarterly results so far, 72% have exceeded analysts’ profit estimates and 56% have topped sales projections, data compiled by Bloomberg show.

Caterpillar Inc. was the biggest decliner in the Dow industrial. Shares of the construction- and mining-equipment maker sank 2.08, or 2.4%, to 83.44 as its second-quarter earnings fell short of analyst estimates.

Boeing Co. beat forecasts for earnings and revenue, but shares turned lower during the companys conference call, and closed down 0.8%, at 106.95.