Stocks fall in early afternoon on mixed earnings

BERNARD CONDON AP Business Writer Published:

NEW YORK (AP) -- Stocks are falling in early afternoon trading Tuesday following mixed earnings from U.S. companies. Home builder stocks fell broadly after more signs of weakness in the housing market.

KEEPING SCORE: The Standard & Poor's 500 index dropped seven points, or 0.4 percent, to 1,876 as of 12:51 p.m. Eastern time. The Dow Jones industrial average fell 83 points, or 0.5 percent, to 16,446. The Nasdaq composite fell 21 points, or 0.5 percent, to 4,116.

TWITTER TUMBLE: The instant messaging service plunged $4.75, or 12.3 percent, to $34 after Twitter insiders were allowed to sell stock for the first time since the company's initial public offering in November. The company said last month that some key insiders, such as CEO Dick Costolo, did not plan to sell stock when the lock-up period expired. Twitter has lost more than half its value since going as high as $74.73 in December.

OFFICE DEPOT UP: The office supply chain soared 70 cents, or 17 percent, to $4.87 after reporting adjusted profits for the first quarter that were twice as high as analysts expected. The company also said it would close at least 400 U.S. stores after its merger with OfficeMax resulted in the overlap of retail locations.

INSURER WOES: American International Group fell $2.24, or nearly 4 percent, to $50.47. The company reported revenue that was below what investors expected due to higher catastrophe losses and lower investment income.

DISCOVERY DROP: Discovery Communications fell $2.70, or 3.5 percent, to $75.06 after reporting a gain in first-quarter revenue that was lower than analysts expected.

THE QUOTE: "People are getting weary of the 'things-are-getting-better' story," said Steven Ricchiuto, chief economist of Mizuho Securities. "We're hiring more workers, but we're not paying them more ... and so you can only get a certain level of consumer spending, which is three-quarters of GDP."

HOME PRICES: U.S. home prices rose at a slightly slower pace in the 12 months that ended in March, according to data provider CoreLogic. It's another sign that weak sales, caused in part by rising mortgage rates, have begun to restrain the housing market's sharp price gains. Home builder stocks fell broadly. Ryland Group fell $1.32, or 3.4 percent, to $37.44 and D.R. Horton fell 64 cents, or 3 percent, to $22.34.

ANOTHER BIG PHARMA DEAL: Merck fell $1.37, or 2.3 percent, to $57.27 after the drug company agreed to sell its non-prescription medicine and consumer-care business to Germany's Bayer for $14.2 billion. Products in that business include Claritin allergy pills, Coppertone sunscreen and Dr. Scholl's footcare products.

MORE EXPORTS: The U.S. trade deficit narrowed in March as exports rose to the second highest level on record. Exports were led by gains in sales of aircraft, autos and farm goods. The deficit declined to $40.4 billion, down 3.6 percent from a revised February imbalance of $41.9 billion, the Commerce Department reported. The February deficit had been the biggest trade gap in five months.

EUROPE: In Europe, Germany's DAX fell 0.7 percent and the CAC-40 in France fell by 0.8 percent. Britain's FTSE-100 lost 0.3 percent.

BONDS AND OIL: U.S. government bond prices rose slightly. The yield on the 10-year Treasury note fell to 2.60 percent from 2.61 percent Monday. The yield is close to its lowest of the year and has fallen from 3 percent at the start of January. The price of oil rose 63 cents, or 0.6 percent, to $100.11 a barrel.