By Stephen Culp
NEW YORK (Reuters) -U.S. stocks turned lower on Tuesday as investors scrutinized a spate of corporate earnings while crude extended its slide due to easing supply worries and weakening demand.
The three major U.S. indexes hovered in early trading before heading lower, with the S&P 500 and the Dow easing back from Monday’s record closing highs.
Financial firms Goldman Sachs, Citigroup and Bank of America all posted better-than-expected profit, while healthcare companies UnitedHealth (NYSE:UNH) and Johnson & Johnson (NYSE:JNJ) results underwhelmed investors.
“The stock market had a pretty strong day yesterday, and at the moment (stocks are) near all-time highs,” said Tim Ghriskey, senior portfolio strategist Ingalls & Snyder in New York. “The focus here is on earnings … and, as usual, earnings will be somewhat mixed.”
“This is a waiting period and the market is stuck in neutral before we see more earnings reports,” Ghriskey added.
Energy stocks, pulled lower by sliding crude prices, suffered the steepest percentage drop.
The Dow Jones Industrial Average fell 141.91 points, or 0.33%, to 42,923.71, the S&P 500 fell 20.63 points, or 0.35%, to 5,839.44 and the Nasdaq Composite fell 146.31 points, or 0.79%, to 18,357.27.
European stocks edged away from Monday’s two-week high, dragged lower by mining and energy stocks, while investors scrutinized corporate earnings and kept their focus on the European Central Bank’s rate decision on Thursday.
MSCI’s gauge of stocks across the globe fell 3.29 points, or 0.36%, to 854.06.
The STOXX 600 index fell 0.55%, while Europe’s broad FTSEurofirst 300 index fell 13.20 points, or 0.63%.
Emerging market stocks fell 10.33 points, or 0.89%, to 1,149.73. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.83% lower 0.83%, at 608.61, while Japan’s Nikkei rose 304.75 points, or 0.77%, to 39,910.55.
Oil prices slid to a near two-week low, extending Monday’s losses amid easing supply pressures arising from the conflict in the Middle East, and growing signs of weakening demand.
“Sliding oil prices are disinflationary and that’s a positive for the broader economy,” Ghriskey said. “What you’re seeing now is the speculation that Middle East oil properties are going to be exempt from attack.”
“And falling oil prices does say something about global demand.”
U.S. crude fell 5.11% to $70.05 a barrel and Brent fell to $73.71 per barrel, down 4.84% on the day.
Benchmark U.S. Treasury yields edged lower as the bond market resumed trading following its three-day Columbus Day weekend.
The yield on benchmark U.S. 10-year notes fell 2.8 basis points to 4.045%, from 4.073% late on Friday.
The 30-year bond yield fell 4.2 basis points to 4.3398% from 4.382% late on Friday.
The 2-year note yield, which typically moves in step with interest rate expectations, rose 0.2 basis points to 3.943%, from 3.941% late on Friday.
The dollar was nominally lower against a basket of world currencies amid wagers that the Federal Reserve will proceed with modest rate cuts in the near term.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.07% to 103.11, with the euro down 0.06% at $1.0902.
Against the Japanese yen, the dollar weakened 0.37% to 149.16.
Gold gained traction as the dollar lost some momentum.
Spot gold rose 0.32% to $2,659.48 an ounce. U.S. gold futures rose to $2,647.80 an ounce.
(Fixes typo in paragraph 8 to say ‘edged away’ not ‘edged way’, fixes final sentence to say ‘Gold futures rose’.)
