Stocks edge lower ahead of earnings, inflation data
Tech, communication, health care take losses
Stocks closed lower on Wall Street after a wobbly day of trading Tuesday as investors wait for more data on inflation and corporate earnings this week.
The major indexes wavered between small gains and losses for much of the day, before the selling gained momentum in the final minutes of trading. The S&P 500 slipped 0.2% after having been up 0.3% in the early going.
The Dow Jones Industrial Average fell 0.3% and the Nasdaq composite slipped 0.1%. Small company stocks, a gauge of confidence in economic growth, fared better than the broader market, driving the Russell 2000 index 0.6% higher.
Technology, communication and health care companies accounted for much of the losses in the S&P 500. Intel closed 2.4% lower, while AT&T slid 2.3% and Google’s parent company Alphabet dropped 1.8%. Johnson & Johnson fell 1.6%.
A mix of retailers and other companies that rely on direct consumer spending gained ground. Ford rose 3.6% and Lowe’s added 0.5%. Real estate and utilities stocks also rose.
The pullback in the S&P 500 marked the index’s third straight decline. After two days, the index’s losses have offset its 0.8% gain last week.
The selling suggests investors are worried that they will be disappointed by the upcoming third-quarter company earnings reporting season, said Sam Stovall, chief investment strategist at CFRA.
“Investors are looking at higher rates, higher inflation, higher oil prices, and thinking the worst,” Stovall said. “But when we see other factors, such as small-caps doing well or the market not really falling as much as it could, that sort of indicates to me that there is underlying strength and that investors are just waiting for a better re-entry point.”
The S&P 500 fell 10.54 points to 4,350.65. The Dow dropped 117.72 points to 34,378.34. The Nasdaq slipped 20.28 points to 14,465.92. The Russell 2000 rose 13.63 points to 2,234.27. European and Asian markets closed mostly lower.
The yield on the 10-year Treasury fell to 1.57% from 1.60% late Friday. The bond market was closed on Monday for Columbus Day.
The latest round of earnings reports will give a clearer picture of how companies fared in the most recent quarter amid a surge in COVID-19 cases.
JPMorgan Chase will kick off earnings for banks on Wednesday. Bank of America, Wells Fargo and Citigroup will follow with their latest quarterly results on Thursday.
Investors will also be closely watching the latest updates on inflation from the Labor Department. On Wednesday, it will release its Consumer Price Index for September, a gauge of how inflation is pressuring costs for consumers. Additional information on inflation pressures for businesses will come Thursday when the Labor Department releases its Producer Price Index.
Gold for December delivery rose $3.60 to $1,759.30 an ounce. Silver for December delivery fell 16 cents to $22.51 an ounce, and December copper fell 4 cents to $4.33 a pound.
The dollar rose to 113.67 Japanese yen from 113.34 yen. The euro fell to $1.1531 from $1.1562.