Wall Street stalls on Boeing slide, earnings jitters
U.S. stocks headed lower on Monday, following the S&P 500`s seven-day winning streak, as Boeing`s shares took a hit and investors braced for what could be the first decline in corporate earnings since 2016.
Shares of the U.S. planemaker fell 4.7%, pulling the S&P industrials sector down 1%, after the company said it would cut production of its 737 MAX aircraft by nearly 20%.
Southwest Airlines Co fell 2.7% after the carrier said it was pulling out all 737 MAX jets from its flight schedules through June 7, extending its earlier timeline by a week.
The sector was also pressured by General Electric Co`s 8.4% tumble after J.P.Morgan downgraded the conglomerate`s shares to "underweight".
The recent run of gains in U.S. stocks has taken the S&P 500 within 2% of its record closing high hit in September, supported 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, lowered earnings expectations and worries about an economic slowdown are starting to dampen investor enthusiasm.
"We`ve seen some progress on trade, the Fed has backed off on interest rate increases, we saw job growth come back. But none of that matters if companies aren`t making money and that`s been one of the major concerns in the market," said Brad McMillan, chief investment officer for Commonwealth Financial Network.
Major banks are slated to kick off first-quarter earnings season later in the week and analysts expect a 2.3 percent fall in profits at S&P 500 companies in the first quarter, according to Refinitiv data.
At 12:43 p.m. ET the Dow Jones Industrial Average was down 135.20 points, or 0.51%, at 26,289.79, the S&P 500 was down 6.00 points, or 0.21%, at 2,886.74 and the Nasdaq Composite was down 11.37 points, or 0.14%, at 7,927.33.
Seven of the 11 major S&P sectors were lower. Energy stocks, among a few bright spots, posted a 0.40% rise as oil prices hit a five-month high.
Symantec Corp jumped 6% after a report that Goldman Sachs raised its rating on the cyber security firm`s stock to "buy" from "neutral".
Procter & Gamble Co climbed 1.2% after Wells Fargo raised its rating on the company`s shares to "outperform" from "market perform".
Declining issues outnumbered advancers for a 1.18-to-1 ratio on the NYSE and for a 1.41-to-1 ratio on the Nasdaq.
The S&P index recorded 23 new 52-week highs and no new lows, while the Nasdaq recorded 45 new highs and 22 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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