Boeing woes, earnings anxiety push Wall Street lower

U.S. stocks pulled back on Monday after the S&P 500`s seven-day winning streak, as Boeing shares fell and investors braced for what could be the first decline in corporate earnings since 2016.

Shares of Boeing Co dropped more than 4 percent, accounting for more than three-quarters of Dow industrial`s fall, after the company said it would cut production of its 737 MAX aircraft by nearly 20 percent.

The benchmark index is about less than 2% away from its record closing high hit in September, lifted by the Federal Reserve`s decision to hold off on interest rate hikes in 2019 and on hopes of a trade deal with China.

However, expectations of disappointing earnings growth and worries about economic slowdown could start to weigh on the markets.

Major banks are slated to kick off first-quarter earnings season later in the week and analysts expect a 2.2 percent fall in S&P 500 earnings, according to Refinitiv data.

"While we underestimated the impact of the Fed`s pivot on equity prices, we see the earnings recession as just the beginning," Morgan Stanley analysts led by Michael Wilson wrote in a note.

"We think there will need to be some evidence of a real turn in earnings growth for U.S. stocks to advance much further."

The S&P 500 is trading 16.6 times its next 12-month earnings estimate, up from 14.6 times during the peak of December sell-off but below the 17.3 times at its record high hit in late September.

The S&P industrial index fell 0.95%, weighing the most on the benchmark.

Another big decliner in the sector was General Electric Co, which fell 5.9% after J.P.Morgan downgraded the conglomerate`s shares to "underweight", saying Wall Street is overprojecting a bounce in cash flow in the coming years.

At 10:01 a.m. ET the Dow Jones Industrial Average was down 152.76 points, or 0.58%, at 26,272.23, the S&P 500 was down 10.18 points, or 0.35%, at 2,882.56 and the Nasdaq Composite was down 34.58 points, or 0.44%, at 7,904.12.

Nine of the 11 major S&P sectors were lower. Energy stocks, among few gainers, posted a 0.3% rise on oil bounce. [O/R]

Micron Technology was down 0.9% after Cowen and Co cut its rating on the chipmaker`s stock to "market perform" from "outperform".

Procter & Gamble Co climbed 0.7% after Wells Fargo raised its rating on the company`s stock to "outperform" from "market perform".

Declining issues outnumbered advancers for a 1.65-to-1 ratio on the NYSE and a 2.03-to-1 ratio on the Nasdaq.

The S&P index recorded 13 new 52-week highs and no new lows, while the Nasdaq recorded 27 new highs and 15 new lows.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)