S&P, Nasdaq off peak levels as earnings gains speed

NEW YORK — The S&P and Nasdaq slipped on Tuesday from record closing levels as investors digested a batch of corporate earnings results, while an expected policy announcement from the Federal Reserve on Wednesday helped to limit moves.

3M Co. climbed 3.26% as one of the biggest boosts on the Dow after it benefited from lower costs and demand for disposable respirator masks, hand sanitizers and safety glasses amid a surge in coronavirus infections.

Johnson & Johnson also provided a strong lift, up 2.71% as the drug maker said it expected to report eagerly awaited COVID-19 vaccine data early next week. Of the 84 companies in the S&P 500 that posted earnings through Tuesday morning, 86.9% have topped analyst expectations, according to Refinitiv data.

Still, some companies showed the toll the pandemic has had on their businesses. American Express Co. fell 4.13% and was the biggest drag on the Dow after it posted a 15% drop in quarterly profit as pandemicled lockdowns and business restrictions kept the credit card issuer’s members from traveling and dining out.

Verizon lost 3.17% after the company posted earnings that topped expectations but missed prepaid phone subscriber estimates.

The Dow Jones Industrial Average fell 22.96 points or 0.07% to 30,937.04, the S&P 500 lost 5.74 points or 0.15% to 3,849.62 and the Nasdaq Composite dropped 9.93 points, or 0.07%, to 13,626.07.

After the closing bell, Microsoft shares rose 5.20% as the tech giant beat Wall Street estimates for revenue growth in its Azure cloud computing business as it benefits from a global shift to home learning and working.

Few, if any, changes are expected in the US Federal Reserve’s policy statement at the end of a two-day meeting on Wednesday, with Fed Chair Jerome Powell likely to address inflation in his post-meeting news conference.

With the S&P 500 trading at more than 22 times 12-month forward earnings, concerns about stock bubbles on Wall Street are sparking fears of a pullback. Investors are keeping an eye out for forecasts from corporate America to justify the higher valuations.

Videogame retailer GameStop Corp. climbed 92.71% after surging 144% on Monday, as individual investors again piled into a number of niche stocks, prompting short sellers to scramble to cover losing bets.

General Electric Co. jumped 2.73 after the industrial conglomerate offered an upbeat outlook for its business this year and reported a surge in quarterly free cash flow.

Volume on US exchanges was 14.30 billion shares, compared with the 13.62 billion average for the full session over the last 20 trading days.

Declining issues outnumbered advancing ones on the New York Stock Exchange (NYSE) by a 1.31-to-1 ratio; on Nasdaq, a 1.65-to-1 ratio favored decliners.

The S&P 500 posted 29 new 52-week highs; the Nasdaq Composite recorded 291 new highs and 9 new lows. —