US stocks slide over disappointing reports

NEW YORK (AP) — U.S. stocks retreated from record highs on Wall Street Thursday as large companies delivered weak earnings and disappointing forecasts.

The daylong slide marked a turnaround from Wednesday, when a series of solid earnings helped push major indexes to records. This is one of the busiest weeks in the latest round of corporate earnings. The market has been volatile since reports started trickling in last week.

The market has been swinging up and down for the last two weeks as investors reward and punish corporate earnings, but the overall picture shows solid performances. More than 75% of S&P 500 companies reporting have so far beat somewhat tempered forecasts.

“It’s a pretty low bar to chin and a lot of companies have chinned it,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management.

The S&P 500 index fell 15.89 points, or 0.5%, to 3,003.67. The Dow Jones Industrial Average fell 128.99 points, or 0.5%, to 27,140.98. The Nasdaq composite fell 82.96 points, or 1%, to 8,238.54.

Technology stocks sustained the steepest declines throughout the day. Digital payments company PayPal slid 5.1% after cutting its revenue forecast. Microsoft and Apple also fell. Ford slid 7.5% and sent automakers and consumer-oriented stocks lower after reporting a severe drop in profit that fell shy of analysts’ forecasts.

Align Technology plummeted 27% after the maker of the Invisalign dental system gave investors a surprisingly weak forecast because of weak demand in China. The company held down the rest of the health care sector.

American Airlines shed 8.4% after warning investors of the hefty costs because of the grounding of Boeing 737 Max jets. Both companies weighed down the industrial sector.

Tesla slumped 13.6 % after the electric car maker reported a surprisingly sharp loss during the second quarter. It also announced the departure of its longtime chief technology officer.

A 1.9% drop from Facebook pushed communications stocks lower following the social media company’s latest disclosure that it is being investigated over allegedly anticompetitive behavior.

More than 36% of S&P 500 companies have reported their latest financial results and investors are still expecting a contraction in overall profit. That would mark the second quarter in a row of lower earnings.

Industrial and technology stocks, which have been contending with the impact of trade disputes and tariffs, will feel some of the most severe profit contractions, according to FactSet.

Amazon reported weak profit for the quarter after the market closed. It fell 1.4% in afterhours trading.

Consumer products giant Colgate-Palmolive and McDonald’s will release their results on Friday.

Germany’s DAX fell 1.3% after a survey showed that business confidence Europe’s largest economy dropped to a six-year low. France’s CAC 40 and Britain’s FTSE 100 also fell.

Benchmark crude oil rose 14 cents to settle at $56.02 a barrel. Brent crude oil, the international standard, rose 21 cents to close at $63.39 a barrel. Wholesale gasoline rose 2 cents to $1.88 per gallon. Heating oil was unchanged at $1.91 per gallon. Natural gas rose 2 cents to $2.24 per 1,000 cubic feet.

Gold fell $8.90 to $1,413.90 per ounce, silver fell 21 cents to $16.34 per ounce and copper was unchanged at $2.70 per pound.

Bond prices fell. The yield on the 10-year Treasury rose to 2.08% from $2.05% on Wednesday after the government reported that orders to U.S. factories for large manufactured goods rose last month beyond economists’ forecasts.

The dollar rose to 108.73 Japanese yen from 108.20 yen on Wednesday. The euro strengthened to $1.1144 from $1.1136.

COMMENTS