While you were sleeping: UPS fails to deliver but Dow hits new high

Wall Street was mixed, retreating after touching fresh record highs earlier in the day, as slides in shares of United Parcel Service and tech stocks including those of Apple weighed on sentiment.

Shares of UPS dropped 4.5% after the world's largest package delivery company offered a full-year outlook that failed to meet analysts' expectations.

"The back half of the year appears a little weaker than investors had expected and that's the overhang on the stock," Ben Hartford, analyst with Robert W Baird & Co in Milwaukee, told Reuters. "Investors are wrestling with the fact that they did not change the full-year guidance."

At the close of trading in New York, the Dow Jones Industrial Average advanced 85.54 points, or 0.4%, to 21,796.55, a new closing high. However, the Nasdaq Composite Index dropped 0.6% to 6382.19 and the Standard & Poor's 500 Index slid 0.1% to 2475.42.

"The general sentiment of the market coming into the day was that transportation stocks are telling us something that we're not paying attention to," Art Hogan, chief market strategist at Wunderlich Securities in New York, told Reuters.

"You've got a general feeling a lot of good news is priced in to this market," Hogan said. "That holds with technology. The problem with momentum stocks, once they start heading in a direction they get there violently and that's what we're seeing today."

Earlier in the day, the S&P 500 reached a record 2484.04, while the Nasdaq gained to a record 6460.84.

Boeing still flying high
In the Dow, rallies in shares of Verizon and those of Merck, up 7.7% and 3.3% respectively, outweighed declines in shares of Apple and those of American Express, down 2.3% and 2% respectively. Boeing continued its strong run, rising 3.2% to a new all-time high of $US241.00.

In Europe, the Stoxx 600 Index finished with a decline of 0.1%. The UK's FTSE 100 Index slipped 0.1%, France's CAC 40 Index also fell 0.1% and Germany's DAX Index declined 0.8%.

Shares of AstraZeneca plunged 15.4% in London, the largest percentage drop in the FTSE 100, on disappointing trial results for a cancer treatment.

Nestlé shares closed 1% weaker in Zurich after the world's No 1 food company warned it expects full-year organic growth to come in at the lower end of expectations.

"Organic growth in the first half did not fully meet our expectations," Mark Schneider, Nestlé CEO, said in a statement. "While volume growth remains at the high end of our industry, pricing continues to be soft."

Growth worst in two decades
Full-year organic growth for 2017 will likely be in the lower half of the 2-4% range, Nestlé said. That would be the worst performance in two decades, according to Bloomberg and Reuters.

"Food companies will need to reinvent themselves, and a lot will have to change in the sector, especially in the developed markets like Japan, Europe and North America," Patrik Lang, head of equity research at Julius Baer Group, told Bloomberg.

"That's what we're starting to see: Nestlé wants to invest more in the health trend, Unilever is developing more and more into a company that commits to personal hygiene and Danone is searching for its own identity."

Meanwhile, Diageo shares rallied, closing 6% higher in London, after the world's top £1.5 billion ($US2 billion) share buyback and upgraded its goal for profit-margin growth.

"Our productivity work is delivering ahead of expectations allowing us to reinvest in our brands, drive margin improvement and generate consistent strong cash flow," Ivan Menezes, chief executive, said in a statement.

Diageo said it raised its margin improvement objective to 175 basis points, up from a previous goal for 100 basis points, over the three years ending June 30, 2019.

(BusinessDesk)