Stocks Edge Lower as Investors Parse Earnings Reports
30 October 2019 - 7:58AM
Dow Jones News
By Paul Vigna and Anna Isaac
U.S. stocks slipped Tuesday, as investors sifted through a heavy
batch of earnings reports and awaited key economic data later this
week.
The S&P 500 fell 2.53 points, or 0.1%, to 3036.89, a day
after closing at its first record since July. The Dow Jones
Industrial Average fell 19.30 points, or 0.1%, to 27071.42, after
rising about 75 points earlier in the session.
The Nasdaq Composite declined 49.13 points, or 0.6%, to 8276.85
as technology stocks stumbled in the wake of Alphabet's
disappointing earnings report.
The pullback highlights investors' uncertainty in the middle of
a busy stretch. This week brings a reading on third-quarter gross
domestic product on Wednesday and the monthly jobs report on
Friday. The Federal Reserve, meanwhile, is expected to cut interest
rates for the third time this year at the conclusion of Wednesday's
meeting.
"To break higher from here, you need to see the economic data
turn up," said Rupert Thompson, head of research at Kingswood Group
in London.
To that end, three reports on the housing market Tuesday morning
showed modest strength thanks to lower mortgage rates. But it was
another round of earnings reports that was getting most of the
attention.
General Motors, which said the worker strike this year cost it
$3 billion and cut its 2019 profit forecast, climbed $1.57, or
4.3%, to $38.21 after third-quarter earnings beat Street
estimates.
Shares of Pfizer rose 93 cents, or 2.5% to $38.21 after the
drugmaker raised its financial targets for 2019. Rival Merck gained
$2.90, or 3.5%, to $85.10 after it, too, boosted its outlook.
Google parent Alphabet fell $28.32, or 2.2%, to $1,260.66 after
its third-quarter report showed that rising costs and weakness at
some long-held investments outpaced online advertising sales
growth. Shares of fellow tech giants Apple and Amazon.com also
declined.
Grubhub slumped $25.28, or 43%, to $33.11 -- the stock's
biggest-ever one-day decline -- after the online-delivery company
said competition is hurting its orders and customer growth, and cut
its outlook as a result.
KKR fell 6 cents, or 0.2%, to $28.64 after reporting
third-quarter earnings that fell 60% from a year ago, but still
beat Street expectations.
Major stock indexes have been largely rangebound the past few
months, and observers aren't convinced yet that the range has been
broken with the latest move up.
"With the recent history of strong selloffs starting soon after
breakouts to new highs, this one has a lot to prove as well," said
Instinet analyst Frank Cappelleri.
It does seem like investors are "starting to dip their toes,"
Kingswood's Mr. Thompson said. Some of the economic data suggest a
possible bottom has been found, he said. That makes the coming data
even more important, he said.
In Europe, the Stoxx Europe 600 index declined 0.2%, led by
losses in financial services and the oil and gas sectors.
The British pound pared back earlier losses and traded at about
$1.29 after the main opposition party in the U.K. said it would
support efforts to hold an early general election. That makes a
national ballot that might help break the parliamentary deadlock
over Prime Minister Boris Johnson's divorce deal with the European
Union more likely. The FTSE 100 index declined 0.3%.
"It's a never-ending and ever-changing soap opera," Mr. Thompson
said. That's made it hard for investors, he said, and helps explain
why sterling has been stuck in a range.
Across Asian markets, the picture was more mixed, with the
Nikkei 225 index up 0.5%, while the Shanghai Composite slumped
0.9%.
U.S. crude fell 0.5% to $55.54 a barrel after data Monday showed
rising inventories.
Write to Paul Vigna at paul.vigna@wsj.com and Anna Isaac at
anna.isaac@wsj.com
(END) Dow Jones Newswires
October 29, 2019 16:43 ET (20:43 GMT)
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