After rally, earnings gloom sets in on Wall Street | Reuters - Firstpost
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After rally, earnings gloom sets in on Wall Street | Reuters

  Updated: Apr 6, 2016 00:45 IST

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Wall Street fell on Tuesday as investors took gains off the table after a recent rally and ahead of an upcoming quarterly reporting season that is expected to reveal sharply lower earnings.

Following a 13-percent surge over the past seven weeks, the S&P 500 declined 0.78 percent, with all 10 sectors down and a sharp drop in pharmaceutical company Allergan.

"In front of earnings season you have people pulling back a little bit and trying to consolidate what they have," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

As S&P 500 companies hand in their first-quarter reports over the next several weeks, average earnings are expected to fall 7.1 percent from the year-ago period, with the energy sector weighing most heavily, according to Thomson Reuters data.

Reflecting concerns on Wall Street, International Monetary Fund Managing Director Christine Lagarde on Tuesday warned of increasing risks to global economic growth unless policymakers take stronger measures.

Lagarde's comments come a week after Fed Chair Janet Yellen urged caution on rate hikes, citing a shaky global economy and low oil prices.

Oil steadied near one-month lows after Kuwait said an output freeze by top producers would proceed without Iran. [O/R]

Data on Tuesday showed the U.S. trade deficit widened more than expected in February, while another report showed services sector activity rose in March.

At 2:28 pm, (1828 GMT) the Dow Jones industrial average .DJI was down 0.45 percent to 17,656.95 points. The S&P 500 .SPX lost 16.04 points to 2,050.09.

The Nasdaq Composite .IXIC dropped 0.7 percent to 4,857.42.

Among the 10 major S&P sectors, the interest rate-sensitive utilities sector .SPLRCU fell the most, down 1.71 percent.

The S&P financials sector .SPSY dropped 1.14 percent, led by Wells Fargo (WFC.N), while Goldman Sachs (GS.N) was the biggest drag on the Dow.

Allergan (AGN.N) shares fell 15 percent after the U.S. Treasury unveiled rules to curb tax inversion deals, potentially derailing the drugmaker's merger with Pfizer (PFE.N). Pfizer climbed 2 percent.

Allergan was the biggest negative influence on the S&P 500.

Declining issues outnumbered advancing ones on the NYSE by 1,992 to 967. On the Nasdaq, 1,785 issues fell and 964 rose.

The S&P 500 index showed 14 new 52-week highs and two lows, while the Nasdaq recorded 19 new highs and 32 lows.

(Additional reporting by Yashaswini Swamynathan and Abhiram Nandakumar in Bengaluru; Editing by Chizu Nomiyama)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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