FINANCIAL MARKETS
NEW YORK—Stocks had a muddled session on Tuesday, as investors worked through a large batch of corporate earnings from a range of companies including McDonald’s and Texas Instruments.
McDonald’s shares had their biggest one-day percentage decline since the financial crisis, weighing heavily on the Dow Jones industrial average. The Dow closed down 19.31 points, or 0.1 percent, to 18,473.75. The Standard & Poor’s 500 index was effectively flat, rising 0.7 of a point, or 0.03 percent, to 2,169.18 and the Nasdaq composite rose 12.42 points, or 0.2 percent, to 5,110.05. The decline in the Dow was due to McDonald’s, which fell $5.69, or 4.5 percent, to $121.71. Because the Dow is price-weighted and McDonald’s is among the most expensive of the 30 stocks that make it up, the company’s shares have an outsized influence on the index.
McDonald’s reported disappointing growth in the U.S. Sales rose a meager 1.8 percent from a year ago, even with the restaurant chain rolling out an all-day breakfast menu.
Wall Street is in the midst of its busiest week for corporate earnings, with 203 members of the S&P 500 reporting their results. So far, earnings have been better than what analysts had anticipated. Roughly 68 percent of all companies who have reported their results have beaten expectations, according to FactSet.
The market’s rally this month has given some investors pause. After an initial wobble in the days following Britain’s vote in late June to leave the European Union, the S&P 500 has surged 3.3 percent. Now the index is trading at 19 times expected earnings, which is historically high compared to the 14 to 16 times the index typically trades at. The Federal Reserve started twoday policy meeting on Tuesday. Economists do not expect the nation’s central bank to raise interest rates from their current rate of 0.25 percent to 0.5 percent, but will be looking for any signals that policymakers are looking to raise rates later this year. In other company earnings, Texas Instruments rose $5.20, or 8 percent, to $71.42 after the technology company’s quarterly results were better than anticipated. The company also issued a strong forecast for the third quarter.
Benchmark U.S. crude fell 21 cents to close at $42.92 a barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, rose 15 cents to close at $44.87 a barrel in London.
In other energy commodities, heating oil rose less than 1 cent to $1.33 a gallon, wholesale gasoline futures rose 1 cent to $1.35 a gallon and natural gas fell 4 cents to $2.71 per 1,000 cubic feet.