U.S. stocks fell for a second day on Tuesday as strong corporate earnings failed to boost a market already near record highs.
The Dow Jones Industrial Average fell 210 points. The S&P 500 lost 0.5%, while the tech-heavy Nasdaq Composite dipped 0.6%.
Johnson & Johnson shares gained 1% 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 health regulators investigate a rare blood-clotting issue.
Another Dow component, Travelers Companies, rose slightly after 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.”
Many on Wall Street believe much of the upbeat earnings news has already been priced into the market, which 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.
Reopening plays such as airlines and cruise line operators led losses on Tuesday. American Airlines fell 6%, while United dropped more than 8%. Carnival, Norwegian Cruise Line and Royal Caribbean all traded about 4% lower.
The first-quarter earnings season got off to a strong start last week as the major U.S. banks reported blowout numbers. 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.
Tesla rebounded 1.7% after dropping more than 3% in the previous session 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.
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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