PG Procter and Gamble Co

By Jon Sindreu and Akane Otani 

Major indexes edged lower Tuesday, even as individual stocks made big moves after companies released a flurry of corporate earnings reports.

The Dow Jones Industrial Average fell 64 points, or 0.4%, to 18159. The S&P 500 declined 0.4%, and the Nasdaq Composite lost 0.5%.

Markets have steadied this week as better-than-expected earnings raised the potential for the S&P 500 to post earnings growth for the first time in more than a year. Companies in the S&P 500 are now expected to report earnings growth for the third quarter from the year-earlier period, according to FactSet. As of Sept. 30, analysts polled by FactSet had projected a 2.1% decline.

"We're seeing positive but not spectacular growth," said Jon Adams, senior investment strategist at BMO Global Asset Management. "It looks like we might see some modest growth this quarter, so we're off to a good start."

Shares of Procter & Gamble rose 4% after the consumer-goods company posted an unexpected rise in profit. Procter & Gamble was the biggest gainer in the Dow industrials in early trading.

Shares of drugmaker Merck & Co. also lifted the index, gaining 1.6%.

Under Armour slid 14% after the athletic apparel maker, whose profits grew in the third quarter, tempered its growth expectations going forward.

U.S. investment manager BlackRock warned Tuesday that U.S. earnings look better because analysts had previously lowered their expectations.

"Early third-quarter earnings have beaten these reduced expectations at a higher-than-average rate," said Richard Turnill, BlackRock's chief investment strategist. "Yet fewer companies are raising their future guidance than in a typical quarter."

Nevertheless, U.S. economic data for the third quarter, set to be released Friday, is broadly forecast to show the world's biggest economy growing at a faster pace.

Markets price in a 74% chance that interest rates will be higher by December, according to CME Group.

As a result, the dollar has risen against other major currencies this month. The WSJ Dollar Index, which measures the U.S. currency against 16 others, slipped less than 0.1% Tuesday.

The Stoxx Europe 600 fell 0.4%.

France's biggest phone carrier, Orange, gained 4% after reporting an increase in sales in the third quarter.

Meanwhile, shares in troubled Italian lender Banca Monte dei Paschi di Siena were choppy as investors remained undecided about its turnaround plan, which will include slashing 2,600 jobs and shutting 500 branches. After rising more than 20% in the early morning, the stock was recently down 15% -- but is still up roughly 60% over the past month.

Business confidence in the German manufacturing sector hit a two-year high in October, according to data released Tuesday.

"Many of the uncertainties plaguing the eurozone economy may have faded somewhat, but concerns about geopolitical risks, instability in the financial sector and monetary policy are far from likely to fade into the background permanently," said ING analyst Bert Colijn.

On Thursday, U.K. officials will provide a glimpse at post-Brexit Britain by releasing gross domestic product figures for the third quarter. Economists expect households and businesses to have shrugged off any immediate adverse effects stemming from the U.K.'s vote to leave the European Union in June.

Strong data could lead markets to expect less monetary stimulus from the Bank of England, which recently reignited its bond-buying program -- known as quantitative easing, or QE.

For global investors, the question is whether to fully embrace risky assets after years in which ultrasafe bonds have been the star performers due to loose policies by central banks.

This month, bond yields have started creeping up, a tentative sign that stronger economic growth -- and worries that central banks have reached the limits of their powers -- may put an end to the rally in fixed income. BlackRock has already warned that 2017 could be "a rough year" for bonds.

The yield on the 10-year Treasury note was recently at 1.752%, compared with 1.763% Monday.

Paul Griffiths, chief investor at First State Investments, believes bonds remain globally overvalued, but stresses that they can remain this way for years before they sell off.

"Whilst there is a steady level of QE happening across the world the ability for bond yields to move in a sustained manner to more normal levels is unlikely," he said.

Asian equity markets painted a mixed picture Tuesday, dragged down by disappointing South Korean GDP data, which drove the Kospi index down 0.5%. A weaker yen boosted Japan's Nikkei Stock Average, which finished up 0.8% at a six-month high.

Write to Jon Sindreu at jon.sindreu@wsj.com

(END) Dow Jones Newswires

October 25, 2016 12:48 ET (16:48 GMT)

Procter and Gamble (NYSE:PG)
Historical Stock Chart
From Mar 2024 to Apr 2024

Procter and Gamble (NYSE:PG)
Historical Stock Chart
From Apr 2023 to Apr 2024