Trading on Wall Street was choppy Tuesday, and stock indexes closed lower, dragged down by some companies’ earnings reports and a sell-off in the technology sector.
The major indexes wavered for much of the day between small gains and losses as investors weighed a mixed batch of earnings reports from McDonald’s, Procter & Gamble and other big companies.
“We’re still waiting to see how earnings season shakes out,” said Karyn Cavanaugh, senior markets strategist at Voya Investment Management. ”There have been some winners and some losers. There’s been a couple of misses.”
The Standard & Poor’s 500 index fell 10.73 points, or 0.4%, to 2,995.99. The Dow Jones industrial average fell 39.54 points, or 0.2%, to 26,788.10.
The Nasdaq, which is heavily weighted with technology stocks, bore the brunt of the selling. It declined 58.69 points, or 0.7%, to 8,104.30.
Smaller-company stocks fared better than the rest of the market. The Russell 2000 index edged up 0.73 of a point, or 0.1%, to 1,550.87.
Bond prices rose. The yield on the 10-year Treasury note, which is a benchmark for the interest rates that banks charge for mortgages and other loans, fell to 1.77% from 1.79%.
Investors have been shifting their focus to corporate earnings reports as they wait for developments in the trade negotiations between the United States and China. Optimism over the latest round of talks, which for now have at least prevented the costly conflict from escalating further, helped put investors in a buying mood in recent weeks. The benchmark S&P 500 has notched weekly gains the last two weeks.
Analysts came into this earnings season expecting profits to decline overall for companies in the S&P 500. But with about 15% of companies in the index reporting so far, results have been surprisingly positive.
Earnings growth fell slightly in the first and second quarters, according to data from FactSet, which was better than Wall Street’s expectation at the start of those reporting seasons.
“The market really moves on earnings,” Cavanaugh said. ”If we see a negative year-over-year earnings growth quarter, it’s going to give the market a little bit of pause.”
McDonald’s shares slid 5% after reporting that its third-quarter profit and revenue fell short of Wall Street’s forecast. It was one of the big decliners among companies that rely on consumer spending.
Travelers shares sank 8.3%, leading the financial sector’s slide, after the insurance company posted earnings that fell far short of analysts’ forecasts.
Biogen shares soared 26.1% after the biotechnology giant handily beat Wall Street’s third-quarter profit and revenue forecasts. It also said it would ask regulators to approve a treatment for Alzheimer’s. The company’s gains gave a strong shot to the broader healthcare sector.
Procter & Gamble shares climbed 2.6% after the consumer products maker posted surprisingly good third-quarter earnings and raised its profit forecast for the year.
The busy week continues Wednesday with earnings reports from Boeing, Caterpillar and Microsoft. American Airlines, Twitter and Amazon will report Thursday.
Technology companies accounted for most of the selling Tuesday. Microsoft slid 1.5%. Payment processors Visa and Mastercard also fell, shedding 3.2% and 4.8%, respectively.
Communications services stocks also helped pull the market down. Netflix led that slide, dropping 4.1%. Facebook lost 3.9% after news that a state-level antitrust investigation into the social networking giant now has the backing of a bipartisan group of 47 state attorneys general.
Benchmark crude oil rose 90 cents to $54.21 a barrel. Brent crude oil, the international standard, rose 74 cents to $59.70 a barrel. Wholesale gasoline was unchanged at $1.61 a gallon. Heating oil was unchanged at $1.94 a gallon. Natural gas rose 3 cents to $2.27 per 1,000 cubic feet.
Gold fell 70 cents to $1,481.70 an ounce. Silver fell 9 cents to $17.44 an ounce. Copper fell 2 cents to $2.62 a pound.
Stocks in Europe finished higher after British lawmakers approved Prime Minister Boris Johnson’s Brexit deal in principle. However, they also rejected the government’s fast-track attempt to pass the bill within days. Johnson said he will “pause” the government’s planned Brexit legislation.