By Yashaswini Swamynathan
U.S. stocks drifted lower on Tuesday as corporate heavyweights Goldman Sachs and Johnson & Johnson disappointed investors with their quarterly results, while geopolitical tensions continued to weigh on market sentiment. The S&P 500 healthcare sector .SPXHC sank 1 percent, dragged down by a 3.2 percent drop in Johnson & Johnson (JNJ.N) after the company's quarterly revenue missed expectations.The financial sector .SPSY was pressured by a 3.5 percent decline in Goldman Sachs (GS.N), whose quarterly profit fell below estimates due to weak trading revenue.Goldman pulled down shares of other major U.S. banks and shaved more than 64 points off the Dow. Although Bank of America (BAC.N) reported better-than-expected profit, its shares reversed course to trade slightly lower, falling in line with the broader trend.
"The news out this morning is earnings-related, but with concerns of the Trump agenda being pushed out a little bit and with the geopolitical tensions, this is not the kind of news you needed and it gives people a reason to not be buyers of the overall market," said Robert Pavlik, chief market strategist at Boston Private Wealth. At 11:06 a.m. ET, the Dow Jones Industrial Average .DJI was down 101.27 points, or 0.49 percent, at 20,535.65, the S&P 500 .SPX was down 6.91 points, or 0.29 percent, at 2,342.1 and the Nasdaq Composite .IXIC was down 16.18 points, or 0.28 percent, at 5,840.61.A rally in U.S. stocks has stalled recently after President Donald Trump's administration failed to pass a healthcare reform bill through Congress.
U.S. Treasury Secretary Steven Mnuchin warned tax reforms could be delayed following setbacks in negotiations with Congress over healthcare.Safe-havens continued to be in favor ahead of crucial presidential elections in France, rising tensions between the United States and North Korea and the possibility of snap elections in Britain.Nine of the 11 major S&P sectors were down. The only ones to gain were consumer staples .SPLRCS and utilities .SPLRCU, whose slow but steady growth makes them attractive during periods of uncertainty.
Netflix (NFLX.O), the first of the FANG stocks to report, was down 1 percent at $145.70 after the video streaming service provider reported weaker-than-expected subscriber numbers in the first quarter, but forecast strong growth in the current quarter.One bright spot was Dow component UnitedHealth (UNH.N) whose shares rose 1.3 percent to $169.25 after the health insurer reported better-than-expected quarterly results and raised its profit and revenue forecasts for the year.Declining issues outnumbered advancers on the NYSE by 1,667 to 1,094. On the Nasdaq, 1,774 issues fell and 843 advanced.The S&P 500 index showed 15 52-week highs and two lows, while the Nasdaq recorded 26 highs and 33 lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D'Silva)
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Published Date: Apr 18, 2017 09:51 pm | Updated Date: Apr 18, 2017 09:51 pm