US stocks fall despite strong Merck, Apple earnings

New York - Apple's and Merck's analyst-beating earnings failed to hold up US stocks in early trade on Tuesday, with the iPhone maker's shares sinking despite its blowout quarter.

The markets opened slightly higher but received a blow with the sharp fall in the Conference Board's Consumer Confidence Index, which unexpectedly sank to 95.2 from 101.4 in March.

About 45 minutes into trade, the Dow Jones Industrial Average lost 106.97 points (0.59%) at 17 931.00.

The broader S&P 500 fell 12.57 (0.60%) to 2 096.35, while the tech-rich Nasdaq Composite Index, led by Apple, gave up 51.59 (1.02%) at 5 008.66.

Merck (+4.0%) impressed investors as sales and profits in the first quarter, though lower than a year ago, beat analyst expectations. Adjusted earnings per share came in at 85 cents, 11 cents above forecasts.

The company raised its full-year adjusted earnings per share forecast to $3.35-$3.48, slightly better than the previous guidance.

Apple rallied in after-market trade late Monday on its strong China-driven results, with quarterly revenues up 27%. The company added $70bn to its dividend and share buyback programmes.

But after an opening surge Tuesday, shares of the world's largest company by market capitalization turned downward, losing 1.9%.

Patrick O'Hare of Briefing.com noted that shares in the $772bn company had climbed 6% over the previous six market sessions.

"If Apple has anything truly working against it, we'd have to say it is the high expectations the company faces that are starting to rub up against the law of large numbers," he said.

Among other companies reporting results Tuesday: Ford slipped 0.8%, Bristol Myers Squibb lost 2.4%, UPS gained 2.4% and Coach lost 8.7%.

Bank of America meanwhile lost 0.3% on news that the SEC is investigating its possible violation of rules designed to protect the funds in accounts of its retail brokerages.

Bond prices fell. The yield on the 10-year US Treasury rose to 1.95% from 1.93% Monday, while the 30-year rose to 2.64% from 2.61%. Bond prices and yields move inversely.