Wall Street closed to the downside after the March trade deficit hit close to a 6-1/2 year high. Bobbi Rebell reports.
After the closing bell on Tuesday, earnings included News Corp. Weakness in print advertising and the strong dollar weighed on revenue, and sent earnings down seven percent for the publisher of the Wall Street Journal. Groupon benefitted from strong direct sales of online product, lifting its revenue three percent, though it still lost money. And Electronic Arts reported earnings that blew past Wall Street forecasts, thanks to surging digital sales. But the video game maker's guidance came up short of expectations. A sharp widening of the U.S. trade gap unnerved investors. Stocks gave back all of Monday's gains. The trade deficit surged in March as goods that were held up by a labor dispute at West Coast ports made their way in. A surge in quarterly profit from its theme parks business boosted Disney's profit, helping it cruise past analysts estimates. Shares rose to a new all-time high. Profit rose even faster at Estee Lauder. Strong demand for makeup and haircare goods at the maker of M.A.C. and Bobbi Brown lifted sales. Its stock was one of the S&P 500's biggest gainers. It's been a mixed bag for corporate earnings so far. Nearly seven out of every ten S&P 500 companies have beaten reduced profit estimates, but more than half of them have missed revenue targets. U.S. Bank's senior portfolio manager Eric Wiegand: SOUNDBITE: ERIC WIEGAND, SENIOR PORTFOLIO MANAGER, U.S. BANK (ENGLISH) SAYING: "Top line is still under pressure from the usual sources, particularly dollar fluctuation as well as commodity price volatility." (13:55) Netflix made the biggest advance among the Nasdaq 100, rising to a record high. Bank of America Merrill Lynch upgraded its shares from "outperform" to "buy" and doubled the price target, citing its strong original content. Separately, the video streaming company urged regulators to reject the AT&T and DirecTV merger. Over in Europe, the weak U.S. trade data and renewed concerns over Greek debt sent stocks south.