U.S. stocks fell for a second day on Tuesday as strong corporate earnings failed to boost the market already near record highs.
The Dow Jones Industrial average fell 120 points. The S&P 500 lost 0.3%, while the tech-heavy Nasdaq Composite also dipped 0.3%.
Johnson & Johnson shares remained flat following better-than-expected earnings and revenue. The company also reported $100 million in first-quarter sales of its Covid-19 vaccine that’s on hold in the U.S. while U.S. health regulators investigate a rare blood-clotting issue.
Another Dow component Travelers Companies also held steady despite quarterly results that topped Wall Street’s estimates. The company also raised its quarterly cash dividend and approved an additional $5 billion of share buybacks.
“The key to determining that will be the sustainability of these earnings increases,” said Tom Essaye, founder of Sevens Report. “Most of the factors that are producing these blowout earnings results are typically considered one offs.”
The major averages fell on Monday, dragged down by overall weakness in the technology sector. The Dow Jones Industrial Average lost more than 120 points, dragged down by a more than 1.5% drop in Intel’s stock. The S&P 500 dropped more than 0.5%.
The Nasdaq Composite was the relative underperformer, dipping nearly 1% as Facebook, Amazon and Microsoft all closed lower. Tesla dipped more than 3% as bitcoin — which makes up some of Tesla’s balance sheet— tanked over the weekend after hitting an all-time high of $64,841 Wednesday morning, according to data from Coin Metrics.
The small-cap benchmark Russell 2000 dropped 1.4% on Monday and was set for more losses Tuesday with futures on the index down 0.8%.
The stock market had been climbing steadily to record after record. The Dow and S&P 500 closed at records on Friday and the Dow crossed above the 34,000 level for the first time ever last week.
The first-quarter earnings season got off to a strong start last week as the major U.S. banks reported. Financials earnings have topped expectations by 38%, while others in the S&P 500 have surprised to the upside by 12%, according to data from Credit Suisse.
Streaming giant Netflix is slated to release numbers after the bell. Wall Street analysts expected Netflix to remain a winner in the streaming space even as the pandemic recovery improves.
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