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: The S&P 500 and the Dow Jones Industrial Average were pulled lower by losses in Johnson & Johnson in late morning trading on Monday, while the Nasdaq was little changed ahead of Google parent Alphabet’s earnings report later in the day.
Johnson & Johnson’s shares fell 1.5% to US$133.21 after South Korea’s Samsung Bioepis said it started US sales of the company’s top-selling drug Remicade.
Investors are also focusing on the earnings of tech heavyweights as a recent rally in their shares have led to concerns about stretched valuations.
However, tech continues to be the best performing S&P sector this year.
“This week is going to be critical to see the passing of the baton from the Fed being the primary driver of the market to corporate fundamentals,” said Matt Miskin, senior capital markets research analyst at John Hancock Investments.
Analysts have raised their expectations for S&P 500 earnings to 8.8%, compared with an 8% rise projected at the start of the month, according to Thomson Reuters I/B/E/S.
Amazon and Facebook are due to report results later this week.
The market will also keep an eye on political developments in Washington, with rising doubts about President Donald Trump’s ability to legislate his pro-growth policies after the failure of the healthcare bill.
The International Monetary Fund shaved its forecasts for US growth to 2.1% for both 2017 and 2018 from its earlier estimates of 2.3% and 2.5%, respectively, citing lack of details on the Trump administration’s stimulus measures.
“For now, better earnings is giving the market the ability to navigate some of the uncertainty that is coming out of Washington but going into next year, the market is likely to become more concerned if policies do not finally come through,” added Miskin.
At 11:03am ET (1503 GMT), the Dow Jones Industrial Average was down 68.05 points, or 0.32%, at 21,512.02, the S&P 500 was down 5.43 points, or 0.21%, at 2,467.11.
The Nasdaq Composite was down 1.73 points, or 0.03%, at 6,386.03.
Also weighing on sentiment was a larger-than-expected fall in home resales volumes for June.
Nine of the 11 major S&P 500 sectors were lower, with the utilities and telecommunications leading the decliners.
Halliburton was down 2.8% after the oilfield services provider warned about flattening growth in North American rig count.
Cal-Maine Foods fell 7.8%, while Hasbro was down 8.9% after reporting their quarterly results.
WebMD Health jumped 19.6% after KKR agreed to buy the online health publisher in a deal valued at about US$2.8bil. KKR was off 0.3%.
Declining issues outnumbered advancers on the NYSE by 1,694 to 1,041. On the Nasdaq, 1,507 issues fell and 1,160 advanced. - Reuters
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