U.S. stock indexes fell on Tuesday, weighed down by a slew of dour earnings forecasts from companies such as Paypal and Apple supplier Skyworks, while investors focused on talks to resolve a debt-ceiling deadlock.
Shares of PayPal Holdings dropped 10.5% and led declines on the benchmark S&P 500 index after the company cut its margin forecast. They were also among the top drags on the Nasdaq Composite index.
Skyworks Solutions Inc shares tumbled 6.9% after forecasting current-quarter revenue and earnings below estimates.
Story continues below
Shares of other Apple suppliers including Qualcomm, Broadcom, Qorvo and Corning fell between 0.9% to 2%. The Philadelphia SE Semiconductor Index was down 1.8%.
Markets are waiting for an update on the debt ceiling from a meeting between U.S. President Joe Biden, Republican House Speaker Kevin McCarthy and other congressional leaders at the White House later in the day.
Worries of a potential government default loom over Washington as early as June 1, if Congress does not act to resolve the deadlock.
Yields on U.S. short-dated Treasury bills jumped sharply as investors sold off bonds, which mature as early as June. That weighed on shares of high-growth companies, including Apple Inc and Microsoft Corp , which fell about 0.3% each.
Story continues below
The action-packed week will see the release of the much-awaited inflation data on Wednesday. The Labor Department’s consumer price index (CPI) is expected to climb 0.4% in April after gaining 0.1% in March.
Reports on producer prices, weekly jobless claims and consumer sentiment are all lined up for the week.
“What you’re seeing is a market trying to understand where we are economically, with the Federal Reserve raising interest rates to up to 5% in a very short amount of time,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.
“It would behoove the Fed to pause and see what kind of impact their moves have on the overall economy.”
At 9:45 a.m. ET the Dow Jones Industrial Average was down 15.53 points, or 0.05%, at 33,603.16, the S&P 500 was down 15.56 points, or 0.38%, at 4,122.56 and the Nasdaq Composite was down 60.23 points, or 0.49%, at 12,196.68.
Story continues below
Boeing Co gained 3%, helping take some pressure off the Dow, after budget carrier Ryanair Holdings Plc placed a multi-billion dollar order for Boeing jets.
Regional bank shares extended declines, with the KBW Regional Banking index down 0.7%, after falling 2.8% on Monday. The KBW Banking index lost 1%, extending losses after edging 0.2% lower in the previous session.
Novavax surged 38.4% as the drugmaker plans a 25% cut to its global workforce.
Under Armour Inc lost 4.2% as the sports apparel maker saw its annual sales and profit below street expectations.
Dialysis services provider
DaVita Inc
jumped 13.1% on raising its annual profit forecast as demand for procedures pickup in the U.S.
Declining issues outnumbered advancers for a 2.56-to-1 ratio on the NYSE and for a 2.21-to-1 ratio on the Nasdaq.
The S&P index recorded six new 52-week highs and 10 new lows, while the Nasdaq recorded 20 new highs and 54 new lows.
(Reporting by Shreyashi Sanyal and Shristi Achar A in Bengaluru; Editing by Sonia Cheema and Anil D’Silva)
Comments
Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.
Join the Conversation