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US Stocks Close Lower 04/20 16:15
Stocks fell for the second straight day Tuesday, giving up more of their
recent gains as Wall Street shifts its focus on a busy week of corporate
earnings reports.
(AP) -- Stocks fell for the second straight day Tuesday, giving up more of
their recent gains as Wall Street shifts its focus on a busy week of corporate
earnings reports.
The S&P 500 fell 0.7%. The benchmark index has now lost nearly all of its
gain from last week. Apple fell 1.3% as part of a broad slide in technology
companies. Banks also accounted for a big share of the selling, which came as
bond yields fell, reversing course after moving higher on Monday.
The yield on the 10-year Treasury fell to 1.56% from 1.60%. Bank of America
dropped 2.8% and Citigroup slid 3.2%.
Investors turned defensive, favoring utilities, real estate stocks and a mix
of companies that make consumer staples like food and household products.
General Mills rose 1.6% and Clorox added 3%.
The market has been swaying between gains and record highs to pullbacks as
investors weigh solid economic growth against the risks still posed by the
virus pandemic. That push and pull will likely continue as vaccine distribution
rolls on and various industries reopen.
"Overall, we're going to have some volatility in the market this year, but
everything to me looks fairly rosy for the next six months or so," said Sylvia
Jablonski, chief investment officer at Defiance ETFs.
The S&P 500 fell 28.32 points to 4,134.94. The Dow Jones Industrial Average
lost 256.33 points, or 0.8%, to 33,821.30. Both the S&P 500 and Dow hit
all-time highs on Friday. After shedding an early gain, the technology-heavy
Nasdaq slid 128.50 points, or 0.9%, to 13,786.27.
The Russell 2000 index of smaller company stocks, which has been outpacing
the broader market all year, took a heavier loss, shedding 43.79 points, or 2%,
to 2,188.21.
Investors are in the middle of first-quarter earnings season. Roughly 80
members of the S&P 500 will report their results this week, as well as one out
of every three members of the Dow. Wall Street will be looking to see if
Corporate America is recovering with the rest of the economy from the
coronavirus pandemic.
On average, analysts expect quarterly profits across the S&P 500 to be up
24% from a year earlier, according to FactSet.
While earnings are likely to drive the market's gyrations the next few
weeks, investors remain concerned about whether companies are prepared to deal
with the impact of higher interest rates should inflation increase, said Greg
Bassuk, CEO of Axs Investments.
"One question is with rates likely continuing to rise over the months ahead,
and more importantly with inflation likely to rise, whether companies are going
to be able to charge more for their products to keep up with greater expenses,"
Bassuk said.
United Airlines slid 8.5% after reporting a loss that was wider than
analysts were expecting, and drugmaker Abbott Laboratories fell 3.6% after
reporting revenue that fell short of forecasts.
Kansas City Southern jumped 15.2% for the biggest gain in the S&P 500 after
another Canadian railway company offered to buy the railroad for $33.7 billion,
far higher than a $25 billion offer made by Canadian Pacific last month.
Netflix slumped 10.6% in after-hours trading after the video streaming
pioneer said it added 4 million more worldwide subscribers from January through
March, its smallest gain during that three-month period in four years. That was
about 2 million fewer than both management and analysts had predicted Netflix
would add during the first quarter.
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