NEW YORK: Stocks on Wall Street closed little changed on Tuesday, with the Dow and S&P 500 slipping on disappointing earnings and little hope for a US coronavirus stimulus before Election Day, though the Nasdaq rose ahead of big technology company results.
Investor sentiment sagged after the White House said a deal on Covid-19 relief could come in “weeks,” meaning a deal is unlikely before the Nov. 3 election.
But the tech-heavy Nasdaq rose as Microsoft Corp firmed in the run-up to its results after the closing bell, and the technology heavyweights kept the S&P 500 slightly in the black for much of the session.
Microsoft beat Wall Street estimates for quarterly revenue which rose 12% to $37.2 billion, as the software giant benefited more from a global shift to work and learning from home.
Shares of drugmaker Eli Lilly and Co fell 6.9% after quarterly profits took a hit from increased costs to develop a Covid-19 treatment. A trial of its antibody therapy failed to show a benefit in hospitalized patients.
“This pullback that we’ve seen is a little bit more of a risk-off move as an additional stimulus package now has been pushed aside,” Kevin Flanagan, head of fixed income strategy at WisdomTree Investments, said. “That led to some disappointment.”
On Monday, the three major US stock indexes posted their biggest declines in about four weeks on a record number of new coronavirus cases in the United States and some European countries, and as the elusive stimulus rattled investors.
Sectors sensitive to economic growth took a hit. The S&P 500 banks index fell 2.73% and the S&P energy sector slid 1.38%.
The Dow Jones Industrial Average fell 222.19 points, or 0.8%, to 27,463.19 and the S&P 500 lost 10.29 points, or 0.30%, to 3,390.68. The Nasdaq Composite added 72.41 points, or 0.64%, to 11,431.35.
The Nasdaq advanced in anticipation of results later this week from Apple Inc, Amazon.com, Google-parent Alphabet and Facebook Inc. The tech bellwethers together account for more than one-fifth of the S&P 500’s total value.
The NYSE FANG+TM Index rose about 2.15%.
Analysts expect the tech sector to post a 0.4% increase in third-quarter earnings from a year earlier, while overall S&P 500 profit is forecast to fall 16.2%, according to Refinitiv data.
Semiconductor designer Advanced Micro Devices Inc fell 4.1% after it agreed to buy Xilinx Inc in a $35 billion all-stock deal. Xilinx shares soared 8.6%, the largest percentage gainer on the S&P 500, while those of AMD-rival Intel fell 2.3%.
Shares of Franklin Resources Inc fell 13.6%, the largest decliner on the S&P 500, as the money manager reported quarterly adjusted earnings of 56 cents per share, below analysts’ expectations.—Reuters
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