U.S. Stocks Waver as Investors Parse Earnings Reports

Date : 10/29/2019 @ 7:13PM
Source : Dow Jones News
Stock : FTSE 100 Index (UKX)
Quote : 7302.94  10.18 (0.14%) @ 4:35PM
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U.S. Stocks Waver as Investors Parse Earnings Reports

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By Paul Vigna and Anna Isaac 

U.S. stocks wavered between small gains and losses Tuesday, a day after the S&P 500 closed at a record, as investors sifted through a heavy batch of earnings reports and awaited key economic data later this week.

The broad stock-market index rose less than a point, failing to build on Monday's high -- the index's first record since July. The Dow Jones Industrial Average fell 3 points, or 0.1%, after rising as much as 75 points earlier in the session.

The Nasdaq Composite declined 0.4% as technology stocks stumbled in the wake of Alphabet's disappointing earnings report.

The lack of follow-through highlights investors' uncertainty ahead of some big reports. This week brings a reading on third-quarter gross domestic product on Wednesday and the monthly jobs report on Friday. The Federal Reserve, meanwhile, is expected to cut interest rates for the third time this year at the conclusion of Wednesday's meeting.

"To break higher from here, you need to see the economic data turn up," said Rupert Thompson, head of research at Kingswood Group in London.

To that end, three reports on the housing market Tuesday morning showed it gaining modest strength thanks to lower mortgage rates. But it was another round of earnings reports that was getting most of the attention.

General Motors, which said the worker strike this year cost it $3 billion and cut its 2019 profit forecast, climbed 5.4% after third-quarter earnings beat Street estimates.

Shares of Pfizer rose 2.9% after the drugmaker raised its financial targets for 2019. Rival Merck gained 4.2% after it, too, boosted its outlook.

KKR fell 0.4% after reporting third-quarter earnings that fell 60% from a year ago, but still beat Street expectations.

Google parent Alphabet fell 2.5% after a third-quarter report showed that rising costs and weakness at some long-held investments outpaced online advertising sales growth.

Grubhub slumped 42% after the online-delivery company said competition is hurting its orders and customer growth, and cut its outlook as a result.

Major stock indexes have been largely rangebound the past few months, and observers aren't convinced yet that the range has been broken with the latest move up.

"With the recent history of strong selloffs starting soon after breakouts to new highs, this one has a lot to prove as well," said Instinet analyst Frank Cappelleri.

It does seem like investors are "starting to dip their toes," Kingswood's Mr. Thompson said. Some of the economic data suggest a possible bottom has been found, he said. That makes the coming data even more important, he said.

In Europe, the Stoxx Europe 600 index declined 0.2%, led by losses in financial services and the oil and gas sectors.

The British pound pared back earlier losses and traded at about $1.29 after the main opposition party in the U.K. said it would support efforts to hold an early general election. That makes a national ballot that might help break the parliamentary deadlock over Prime Minister Boris Johnson's divorce deal with the European Union more likely. The FTSE 100 index declined 0.3%.

"It's a never-ending and ever-changing soap opera," Mr. Thompson said. That's made it hard for investors, he said, and helps explain why sterling has been stuck in a range.

Across Asian markets, the picture was more mixed, with the Nikkei 225 index up 0.5%, while the Shanghai Composite slumped 0.9%.

U.S. crude fell 0.1% to $55.79 a barrel after data Monday showed rising inventories.

Write to Paul Vigna at paul.vigna@wsj.com and Anna Isaac at anna.isaac@wsj.com

 

(END) Dow Jones Newswires

October 29, 2019 14:58 ET (18:58 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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