Stocks drop on earnings reports

U.S. stocks fell Tuesday after weak first-quarter reports from Johnson & Johnson and Goldman Sachs frustrated investors who hope that company earnings are on the rise. Healthcare companies lost the most.

Wall Street has high hopes for company earnings this spring, and weak results from the world’s largest healthcare products firm and one of the biggest financial firms had them worried. Investors also looked for safety after the British government called for a surprise early election next month. Bond prices and the pound rose, and European stock indexes tumbled.

Kate Warne, an investment strategist for Edward Jones, said Goldman Sachs and Johnson & Johnson had a dramatic effect on stocks because investors expect a very strong round of company earnings reports this month.

“Stronger growth is likely to support higher stock prices even in the absence of pro-growth policies from the Trump administration,” Warne said.

Johnson & Johnson slid 3.1% to $121.82, its biggest one-day drop in a year, after investors were disappointed with its sales. Revenue from its top-selling drug, Crohn’s disease treatment Remicade, fell 6%. Meanwhile, growth for many consumer health products slowed, and payers demanded bigger rebates on several items.

Prescription drug distributor Cardinal Health sank 11.5% to $72.39 after it gave weak profit forecasts for this year and next as drug prices fall. It also said it will pay $6.1 billion to buy a group of businesses from medical device maker Medtronic.

Goldman Sachs’ revenue fell short of investor projections in the first quarter as its trading desks didn’t perform as well as their competitors’. Its shares declined 4.7% to $215.59, their biggest drop since June.

Bond prices jumped. The yield on the 10-year Treasury note fell to 2.18%, its lowest since Nov. 11, from Monday’s 2.25%.

Investors also bought shares of companies that pay big dividends.

Netflix sagged 2.6% to $143.36 after it said it didn’t gain as many subscribers in the first quarter as investors hoped. Its second-quarter profit guidance also fell short of analyst estimates.

U.S. crude oil futures fell 24 cents to $52.41 a barrel. Brent crude fell 47 cents to $54.89 a barrel. Wholesale gasoline fell 1 cent to $1.71 a gallon. Heating oil fell 1 cent to $1.62 a gallon. Natural gas fell 2 cents to $3.15 per 1,000 cubic feet.

Gold rose $2.20 to $1,294.10 an ounce. Silver fell 24 cents, or 1.3%, to $18.27 an ounce. Copper fell 7 cents, or 2.6%, to $2.53 a pound.

The dollar fell to 108.42 yen from 108.59 yen.