U.S. Stocks Slide as Bank, Health-Care Shares Fall
April 18 2017 - 4:59PM
Dow Jones News
By Akane Otani and Mike Bird
Major stock indexes fell Tuesday, weighed down by a slide in
shares of banks and health-care companies.
Investors have backed away from stocks in recent weeks while
picking up government bonds as tepid economic data, as well as
flaring political tensions around the world, stoked demand for
haven assets.
A series of disappointing earnings reports contributed to the
retreat in stocks Tuesday, investors and analysts said. With
investors' expectations for pro-growth policies from the Trump
administration waning, many say continued signs of corporate health
will be key to stocks moving higher.
"The market's taken a bit of a pause lately, and part of that
has to do with markets in the U.S. being at the high end of
valuations," said Mark Watkins, regional investment strategist at
the Private Client Group at U.S. Bank in Park City, Utah. "If we
see earnings that miss or are below expectations, that could be a
warning sign."
The Dow Jones Industrial Average lost 114 points, or 0.6%, to
20523. The S&P 500 fell 0.3%, and the Nasdaq Composite lost
0.1%.
Bank stocks slid after Goldman Sachs Group's first-quarter
trading results fell short of those posted by its rivals. Shares of
Goldman Sachs fell 4.7%, wiping away about 73 points from the Dow
industrials. The KBW Nasdaq Bank Index of leading U.S. commercial
lenders lost 1%.
Bank of America shares initially traded higher, but later slid
0.4%, after the company reported a higher-than-expected
first-quarter profit and revenue that beat analysts'
expectations.
Declines in health-care stocks put further pressure on major
indexes, with Johnson & Johnson shedding 3.1% after the company
posted underwhelming sales in the latest quarter. Health-care
stocks fell 1% in the S&P 500.
"Now is when earnings become critical for the direction of the
markets moving forward," said Michael Binger, senior portfolio
manager at Gradient Investments. With stocks still trading near
their all-time highs, Mr. Binger said he would be watching for not
just solid earnings results but also a pickup in corporate
guidance.
Government bonds gained, with yields on the 10-year U.S.
Treasury note falling to 2.177% -- their lowest settlement since
Nov. 10 -- from 2.248% Monday. Yields fall as bond prices rise.
Elsewhere, European stocks dropped after British Prime Minister
Theresa May said she would call an early general election, a move
some analysts interpreted as an effort to get more leeway in
upcoming exit negotiations with the European Union.
The Stoxx Europe 600 index fell 1.1%, and U.K.'s export-heavy
FTSE 100 lost 2.5%, weighed down by a rally in the pound.
The U.K. currency jumped 2.2% against the dollar to $1.2845. A
stronger pound typically weighs on the FTSE 100, since it cuts into
sterling-denominated earnings.
In Asia, the Shanghai Composite Index closed down 0.8% in its
third consecutive session of losses. Hong Kong's Hang Seng Index
fell 1.4%, its largest one-day decline since December.
Write to Akane Otani at akane.otani@wsj.com and Mike Bird at
Mike.Bird@wsj.com
(END) Dow Jones Newswires
April 18, 2017 16:44 ET (20:44 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Mar 2024 to Apr 2024
FTSE 100
Index Chart
From Apr 2023 to Apr 2024