Wall Street dips on weak earnings, strong dollar
U.S. stocks fell on Thursday after a slew of weak quarterly reports dampened hopes of a robust earnings season, with a strengthening dollar and trade tensions also weighing on.
The dollar hit a one-year high on Thursday, boosted by the Federal Reserve`s bullish view of the U.S. economy. But the gains in the greenback dragged on metal prices and could hurt companies that get a chunk of their revenue from overseas.
Earlier this week, Netflix said the strong dollar impacted its results and U.S. multinationals are starting to reevaluate their currency hedging strategies.
"On most people`s minds is the strength of the dollar and it has been pushing new highs over the past 24 hours," said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.
Bank of New York Mellon fell 6.13 percent after saying the loss of two clients will continue to hurt results, while insurer Travelers dropped 3.3 percent after missing profit estimates due to storm-related losses.
The financial sector fell 0.96 percent, the most among the 11 S&P sectors. The materials group followed with a 0.90 percent drop as metal prices fell.
Trade tensions loomed over the markets, with the European Union saying it was preparing a list of imports to hit if the United States imposes tariffs on EU cars.
A group representing major automakers said U.S. tariffs on cars and car parts could raise vehicle prices by $83 billion. Ford fell 0.5 percent and General Motors skid 1 percent.
At 11:33 a.m. EDT the Dow Jones Industrial Average was down 78.43 points, or 0.31 percent, at 25,120.86, the S&P 500 was down 7.89 points, or 0.28 percent, at 2,807.73 and the Nasdaq Composite was down 13.85 points, or 0.18 percent, at 7,840.59.
Still, advancing issues outnumbered decliners by a 1.25-to-1 ratio on the NYSE and a 1.24-to-1 ratio on the Nasdaq.
Traders are looking at 2,800 point-mark on the S&P as a break-out level, Antonelli said .
Market optimism was also dented by disappointing earnings reports from eBay, slumping 8.2 percent, Phillip Morris, falling 4.5 percent and American Express, down 2 percent.
Among the bright spots was IBM, which gained 3.4 percent, after its results topped estimates.
Comcast gained 3 percent after dropping its pursuit of a group of media assets owned by Twenty-First Century Fox, which fell 1.6 percent.
Disney, which has agreed on a deal to buy the Fox assets, rose 3.2 percent.
The S&P index recorded 17 new 52-week highs and two new lows, while the Nasdaq recorded 74 new highs and 24 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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