(Bloomberg) — U.S. stocks joined a global selloff, sending the Standard & Poor's 500 Index toward its first monthly drop since January, as Exxon Mobil Corp. to Micron Technology Inc. tumbled amid weaker corporate results.
Exxon and Murphy Oil Corp. dropped amid concern over output, driving energy companies to the biggest decline among 10 industries in the S&P 500. Micron slid 7.6 percent after earnings from Samsung Electronics Co., the world's biggest smartphone maker, trailed estimates.
Whole Foods Group Inc. dropped 3.4 percent after lowering its 2014 revenue forecast. Kraft Foods Group Inc. declined 4.3 percent after reporting quarterly results that missed estimates.
The S&P 500 slid 1.3 percent to 1,944.22 at 11:15 a.m. in New York, dropping below its average price over the past 50 days. The Dow Jones Industrial Average declined 184.57 points, or 1.1 percent, to 16,695.79. Trading in S&P 500 stocks was 20 percent above the 30-day average at this time of day.
"The Fed is stepping out of the way and the market's valuation is high enough that people are quick to take profit," Wayne Wilbanks, who oversees $2.5 billion as chief investment officer at Wilbanks, Smith & Thomas Asset Management LLC in Norfolk, Virginia, said in a phone interview. "You are going to get more days like today, where investors are more trigger happy, quicker to liquidate. Everybody knows a correction is coming and it will come."
The S&P 500 had climbed 0.5 percent in July through yesterday, heading for a sixth straight monthly gain, as companies from Facebook Inc. to Chipotle Mexican Grill Inc. reported a surge in profit, while Time Warner Inc. rallied as Rupert Murdoch's 21st Century Fox Inc. made a takeover offer. The gauge closed little changed yesterday as weaker earnings and the Federal Reserve's decision to keep trimming asset purchases offset better-than-forecast economic growth.
Global Earnings
Fifty S&P 500 companies report quarterly earnings today. About 75 percent of those that have released results this season have topped analysts' estimates for profit, while 66 percent have exceeded sales projections.
Global equities fell amid weaker-than-projected earnings from Europe and Asia. Samsung's results pushed technology stocks lower, while Deutsche Lufthansa SA joined Adidas AG among European companies that slid following market updates. Banco Espirito Santo SA plunged by the most on record and the bonds slumped after the Portuguese lender was ordered to raise capital following a 3.6 billion-euro ($4.8 billion) first-half net loss.
Market Anxiety
"Maybe the market is getting a little bit tired here," David Chalupnik, the head of equities at Nuveen Asset Management in Minneapolis, said by phone. His firm runs about $120 billion. "It's more concern around Europe. We've had an extremely easy monetary environment for the past six years. When that changes, it's going to cause a lot of anxiety."
U.S. gross domestic product expanded at a 4 percent annual pace in the second quarter, confirming the central bank's view that a first-quarter contraction was transitory. The Fed yesterday cut its monthly bond buying to $25 billion in its sixth consecutive $10 billion reduction.
The Fed's Open Market Committee reiterated that it's likely to reduce bond buying in "further measured steps" and to keep interest rates low for a "considerable time" after ending purchases. The central bank said slack in the labor market persists even though the economy is picking up.
Labor Market
