By Amy Caren Daniel
(Reuters) - U.S. stocks slipped on Thursday after a handful of disappointing earnings pointed to a slowing global economy and as European Central Bank signaled monetary policy easing in the future, underwhelming investors who had expected more.
ECB chief Mario Draghi said the risk of a recession in euro zone was "pretty low" and that policymakers did not discuss rate cuts at the meeting. This comes against the backdrop of Europe's export-focused manufacturing sector bearing the brunt of a global trade war.
"Europe's got some significant problems with its economic landscape, and the commentary from the ECB's Mario Draghi is not very encouraging," said Peter Kenny of Kenny's Commentary LLC and Strategic Board Solutions LLC in New York.
"We are talking about an economy that hasn't fully recovered from a financial crisis. It's a big concern if the European markets continue to deteriorate, that could have a spillover and could affect the U.S. economy."
The technology sector () fell 0.4%, and led the declines among the S&P sectors trading lower as chipmakers fell following Xilinx Inc's (O:) dour forecast.
The chipmaker declined 2.7% after providing current-quarter revenue forecast below market expectations, hit by the impact of U.S. restrictions on selling to Huawei Technologies Co Ltd [HWT.UL]. The Philadelphia chip index () dropped 0.97%, a day after hitting a record high.
Tesla Inc (O:) tumbled 13.1% after the electric carmaker softened its language once again on meeting its profit timeline.
"I don't think it's all too surprising that we're getting a mixed bag of earnings and some pockets of weakness," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida. "The key for investors is if these pockets of weakness are a sign of an economic downturn or just a slow patch."
In a bright spot, 3M Co (N:) rose 1% after the manufacturing conglomerate reiterated its full-year earnings forecast despite slowing growth in high-profile markets such as China.
Two weeks into the second-quarter earnings season, about 75% of the 185 S&P 500 companies that have reported so far have topped profit estimates, according to Refinitiv data.
Hopes that the Federal Reserve would adopt a looser monetary policy at its rate-setting meeting next week to counter the impact of a protracted U.S.-China trade war have helped Wall Street's main indexes scale record levels this month.
At 11:07 a.m. ET, the Dow Jones Industrial Average () was down 51.63 points, or 0.19%, at 27,218.34, the S&P 500 () was down 5.48 points, or 0.18%, at 3,014.08. The Nasdaq Composite () was down 42.51 points, or 0.51%, at 8,278.99.
Ford Motor Co (N:) fell 7% after the automaker reported a lower-than-expected profit and gave a disappointing full-year earnings forecast.
Facebook Inc (O:) reversed premarket gains to trade 2% lower. The social media giant said new rules and product changes aimed at protecting user privacy would slow its revenue growth into next year.
Align Technology (O:) plunged 26% and was the biggest decliner on the S&P 500, as the orthodontic device maker's current-quarter forecast came below estimates.
Declining issues outnumbered advancers for a 1.69-to-1 ratio on the NYSE and for a 1.63-to-1 ratio on the Nasdaq.
The S&P index recorded 24 new 52-week highs and one new low, while the Nasdaq recorded 65 new highs and 41 new lows.
© Reuters. Traders work on the floor at the NYSE in New York
|Дата публикации: 25.07.2019|