Stocks fall with dollar on mixed earnings

U.S. stocks dropped the most in seven weeks while the dollar slumped as an uneven batch of corporate earnings reports thwarted a risk-on rally and turmoil in Washington threatened the president’s tax overhaul.

The S&P 500 Index fell for the second time this week, with weak results hammering shares in Chipotle Mexican Grill Inc. and Advanced Micro Devices Inc. Ten-year Treasury yields narrowed after reaching their highest since March, and gold rose as investors sought havens from slumping equity markets.

Wednesday’s stock retreat comes the day after Republican Sens. Jeff Flake and Bob Corker publicly criticized President Donald Trump just as he tries to push through big changes in the U.S. tax code.

“The whole Jeff Flake episode at the end of the day yesterday took some time to sink into the markets,” Michael O’Rourke, chief market strategist at JonesTrading Institutional Services LLC, said by phone. “If you’re at the point where you have Flake and then Corker coming after the president, he’s really going to have to negotiate to get the tax reform he wants.”

Investors are looking hard this week at earnings and economic data for indications of broadening growth that may sustain the rallies even as the Federal Reserve and other central banks start to pull back on stimulus.

The Stoxx Europe 600 Index declined as companies in the region reported mixed results. Benchmarks in Asia were largely higher, but Japan’s Nikkei finally snapped its record run of gains. India’s S&P BSE Sensex jumped as much as 1.6 percent after Prime Minister Narendra Modi’s government said late on Tuesday it will inject an unprecedented 2.11 trillion rupees ($32 billion) into the banks over two years to revive growth.

The S&P 500 Index fell 0.47 percent Wednesday in New York, while the Dow Jones Industrial Average declined 0.48 percent and the Nasdaq Composite Index dropped 0.52 percent.