Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 20, 2017. REUTERS/Brendan McDermid
NEW YORK: US stock indexes were lower in late morning trading and pulled back from record levels as weak earnings from industrial heavyweight General Electric (GE) weighed.
Shares of GE fell as much as 5.4% to their lowest level since October 2015, as the company reported a nearly 60% slump in profit and its 2017 profit forecast came in at the low end.
The stock’s fall weighed on other industrials such as Caterpillar and 3M.
“We’ve had a good run for the last few weeks and investors are primarily digesting earnings today,” said Erick Ormsby, chief executive of Alcosta Capital Management.
“GE’s results were okay but they guided lower and that’s weighing on the market too.”
Microsoft fell 0.3%, despite the company reporting strong fourth-quarter earnings.
Attention will turn to earnings from big tech names next week, including Amazon, Alphabet and Facebook .
The Nasdaq came off its 10-day streak of gains, its best since February 2015, after closing at record levels on Thursday.
The tech sector, however, continues to be the best performing S&P sector this year, despite concerns over stretched valuation, as investors look for growth from sectors relatively immune to a policy gridlock in Washington.
“If tech earnings were to disappoint, it might finally be the thing that causes a correction, even if it’s a small one,” said J.J. Kinahan, chief market strategist at TD Ameritrade.
Still, overall earnings are expected to be good with analysts expecting earnings to have climbed 8.6%, above the 8% rise projected at the start of the month, according to Thomson Reuters I/B/E/S.
At 10:50am ET (1650 GMT), the Dow Jones Industrial Average was down 72.93 points, or 0.34%, at 21,538.85, and the S&P 500 was down 6.03 points, or 0.24%, at 2,467.42.
The Nasdaq Composite was down 11.80 points, or 0.18%, at 6,378.20.
The S&P and the Nasdaq are on track to close higher for the third straight week.
All 11 major S&P sectors were lower, with the industrials and energy sectors leading the decliners.
Oil prices fell more than 1.5% after a consultancy report forecast a rise in Opec production for July despite the group’s pledge to curb output.
Visa rose 1.7% after the world’s largest payments network operator raised its annual earnings forecast.
EBay fell 2.8% as the company warned that adjusted profit this quarter could fall below analysts’ estimates.
Honeywell International rose 1.7% after the technology and manufacturing company raised the low-end of its profit forecast.
Declining issues outnumbered advancers on the NYSE by 1,635 to 1,059. On the Nasdaq, 1,464 issues fell and 1,164 advanced. - Reuters
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