U.S. stock markets slid in late trading Monday ahead of another Fed meeting and more earnings reports. The only major economic news today was a 0.4% drop in pending home sales, which shouldn't be a huge shock given the rise in mortgage rates over the past three months. We should expect continued challenges in existing-home sales as rates rise, which will be a major reason the Fed will keep rates low for the foreseeable future. With 45 minutes left in trading, the Dow Jones Industrial Average (^DJI 0.16%) is down 0.2%, while the S&P 500 (^GSPC +0.80%) has fallen 0.27%.
The biggest mover on the Dow is Pfizer (PFE +1.24%), up 1% after announcing a reorganization. The company will split its operations into three businesses -- two that make patent-protected products and one that makes generic drugs. This may prepare the company to eventually split into separate businesses focused on generic and branded drugs, respectively, but that's speculation for the time being. Plus, reorganizations are commonplace in corporate America, so unless the company splits into two or more pieces, I doubt it will make a big difference to shareholders.
The other company gaining steam today is Verizon (VZ 1.61%), also one of last week's big winners. Last week the company jumped on further speculation that it would buy out Vodafone's 45% stake in Verizon Wireless, and today investors are anticipating competitor Sprint's earnings. Sprint reports second-quarter results tomorrow and is expected to report a loss of 1.5 million customers, most of whom went to either Verizon or AT&T.
The duopoly Verizon and AT&T have built in mobile is getting stronger every quarter, and both companies are providing great returns to shareholders. If Sprint does report big subscriber losses, it will make Verizon an even better buy, even if it doesn't get the 100% stake in Verizon Wireless it desires.
