S&P 500, Dow slip on earnings worries, stimulus uncertainty
By Medha Singh and Shivani Kumaresan (Reuters) - The S&P 500 and Dow fell on Tuesday, dragged down by a string of earnings disappointments and doubts about a coronavirus stimulus package before Election Day, although Nasdaq rose ahead of results from mega-cap technology companies.
By Medha Singh and Shivani Kumaresan
(Reuters) - The S&P 500 and Dow fell on Tuesday, dragged down by a string of earnings disappointments and doubts about a coronavirus stimulus package before Election Day, although Nasdaq rose ahead of results from mega-cap technology companies.
Caterpillar Inc fell 3.1% and 3M Co slipped 1.8% after both the industrial companies reported a fall in quarterly earnings.
Investor sentiment sagged after the White House said a potential deal on COVID-19 relief could come in "weeks," casting doubt on whether an accord could be struck with Congress before the Nov. 3 election.
"Stimulus is now pushed back to after the election and the market is digesting that today," said Thomas Hayes, managing member at Great Hill Capital LLC in New York.
Sectors sensitive to economic growth took a hit. The S&P 500 banks index and the S&P energy sector shed about 1% each.
The three major U.S. stock indexes fell to near four-week lows on Monday as investors fretted about record number of new coronavirus infections in the United States and some European countries and an elusive fiscal stimulus.
Meanwhile, Wall Street's fear gauge hovered at its highest level in nearly two months on jitters over the outcome of the election.
Democratic challenger Joe Biden leads President Donald Trump in national polls but the race is much tighter in battleground states which determine the election outcome. At 12:34 p.m. ET the Dow Jones Industrial Average fell 122.58 points, or 0.46% to 27,562.80, the S&P 500 index lost 3.57 points, or 0.10% to 3,397.40 and the Nasdaq Composite gained 54.87 points or 0.48% to 11,413.81.
The tech-heavy Nasdaq rose as Microsoft Corp firmed 1.2% in the run-up to its results after the closing bell. Apple Inc, Amazon.com, Google-parent Alphabet and Facebook Inc, which together account for about a fifth of the S&P 500's total value, also report results this week.
The NYSE FANG+TM Index was up 1.4%.
Analysts expect the tech sector to post a 0.4% increase in third-quarter earnings from a year earlier, while overall S&P 500 profit is forecast to fall 16.2%, according to Refinitiv data.
Concerns over a rise in U.S. coronavirus cases are weighing on the market although technology sector, in particular, seems to be the least exposed, said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
"A focus on big technology companies may move this market to rally despite the problems the virus is creating."
Insurer American International Group Inc gained 0.4% after its board named Peter Zaffino as chief executive officer and approved a plan to separate the life and retirement business from the rest of the company.
Semiconductor designer Advanced Micro Devices Inc fell 4.1% as it agreed to buy Xilinx Inc in a $35 billion all-stock deal. Xilinx shares soared about 8.2%, while those of AMD-rival Intel fell 2.3%.
Merck & Co Inc gained 0.3% as it raised its full-year earnings forecast. In contrast, drugmaker Eli Lilly and Co fell about 5.5% after its quarterly profit took a hit from increased costs to develop a COVID-19 treatment.
Declining issues outnumbered advancers for a 1.6-to-1 ratio on the NYSE and a 0.8-to-1 ratio on the Nasdaq.
The S&P index recorded 11 new 52-week highs and one new low, while the Nasdaq recorded 23 new highs and 48 new lows.
(Reporting by Medha Singh and Shivani Kumaresan in Bengaluru; Editing by Saumyadeb Chakrabarty and Anil D'Silva)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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