Share

Wall St dips as third-quarter earnings season kicks off

New York - US stocks fell on Tuesday, ending a five-day winning streak, as investors focused on upcoming quarterly reports that are expected to reflect a dip in corporate earnings.

A surge in DuPont's stock helped keep the Dow Jones industrial average in positive territory but the S&P 500 and Nasdaq lost ground, with a sharp drop in biotech stocks.

The S&P health index lost 2.33%, the worst performer among the ten major S&P sectors. The sector has been under intense scrutiny over high drug prices.

The Nasdaq biotechnology index ended down 3.77%, recovering from deeper losses of around 6.6%.

The S&P 500 index had gained 5.6% over the previous five sessions, its best 5-day run since 2011, after a weak US jobs report hinted at economic weakness but also lowered expectations the Federal Reserve will raise interest rates this year.

The International Monetary Fund cut its global growth forecasts for a second time this year, citing weak commodity prices and a slowdown in China.

Underscoring concerns about the world economy, S&P 500 companies are expected to report a 4.2% fall in earnings in upcoming third-quarter reports, the biggest decline in six years, according to Thomson Reuter’s data.

"It's been a while since we've gone into earnings season with the bar set so low, and that typically works to the advantage of stocks," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.

Stock reactions to quarterly results over the next few weeks may provide signs of whether the equity market has hit rock bottom after over a month of global financial turbulence, Carlson said.

The Dow Jones industrial average edged up 0.08% to end at 16 790.19 points.

The S&P 500 lost 0.36% to 1 979.92 and the Nasdaq Composite dropped 0.69% to finish the day at 4 748.36.

Seven of the ten major S&P sectors ended lower. The energy index was up 2.23%, leading the advancers, after crude oil prices jumped.

DuPont rose 7.67% after CEO Ellen Kullman said she would step down.

Pfizer and Merck were down 2.06% and 2.79%, respectively, both the biggest drags on the S&P health index.

Pepsi rose 1.31% after it reported better-than-expected quarterly results and raised its forecast for the year.

After the bell, shares of Yum! Brands dropped 16%. The restaurant operator reported third-quarter results, including trouble in its key China operation that disappointed investors.

Advancing issues outnumbered decliners on the NYSE by 1 675 to 1 357. On the Nasdaq, 1 554 issues fell and 1 233 advanced.

The S&P 500 index showed six new 52-week highs and one new low, while the Nasdaq recorded 34 new highs and 44 lows.

About 7.6 billion shares changed hands on US exchanges, just above the 7.4 billion average for the previous 20 sessions, according to Thomson Reuters data.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.98
-0.4%
Rand - Pound
24.00
-0.4%
Rand - Euro
20.51
-0.2%
Rand - Aus dollar
12.35
+0.0%
Rand - Yen
0.13
-0.4%
Platinum
903.65
+0.8%
Palladium
1,016.75
+1.5%
Gold
2,207.48
+0.6%
Silver
24.59
-0.2%
Brent Crude
86.09
-0.2%
Top 40
68,260
+0.9%
All Share
74,450
+0.7%
Resource 10
57,117
+2.6%
Industrial 25
103,835
+0.6%
Financial 15
16,488
-0.2%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders