Stocks Edge Lower as Investors Parse Earnings Reports
By Paul Vigna and Anna Isaac
U.S. stocks declined slightly Tuesday, a day after the S&P
500 closed at a record, as investors sifted through a heavy batch
of earnings reports and awaited key economic data later this
The broad stock-market index fell less than 0.1%, failing to
build on Monday's high -- the index's first record since July. The
Dow Jones Industrial Average fell 20 points, or 0.07%, after rising
as much as 75 points earlier in the session.
The Nasdaq Composite declined 0.6% as technology stocks stumbled
in the wake of Alphabet's disappointing earnings report.
The lack of follow-through highlights investors' uncertainty
ahead of some big reports. 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
To that end, three reports on the housing market Tuesday morning
showed it gaining 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 5.4% after
third-quarter earnings beat Street estimates.
Shares of Pfizer rose 2.9% after the drugmaker raised its
financial targets for 2019. Rival Merck gained 4.2% after it, too,
boosted its outlook.
KKR fell 0.4% after reporting third-quarter earnings that fell
60% from a year ago, but still beat Street expectations.
Google parent Alphabet fell 2.5% after a third-quarter report
showed that rising costs and weakness at some long-held investments
outpaced online advertising sales growth.
Grubhub slumped 42% after the online-delivery company said
competition is hurting its orders and customer growth, and cut its
outlook as a result.
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
U.S. crude fell 0.1% to $55.79 a barrel after data Monday showed
Write to Paul Vigna at email@example.com and Anna Isaac at
(END) Dow Jones Newswires
October 29, 2019 16:21 ET (20:21 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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