Wall Street falls after mixed earnings; ECB chief disappoints
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(Reuters) – U.S. stocks fell on Thursday after a handful of mixed earnings reports pointed to a slowing global economy, and as the European Central Bank chief’s comments on monetary policy failed to impress investors.
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., July 24, 2019. REUTERS/Brendan McDermid
European Central Bank President Mario Draghi said the bank’s all-important inflation target should not be viewed as a 2% cap, in a significant move accompanied on Thursday by further explicit hints of easing down the road.
“The market was really looking for a dovish Draghi and he kind of under delivered on that. He wasn’t as outspoken as the market had hoped he would be,” said Bas van Geffen, quantitative analyst at RaboResarch in Utrecht, the Netherlands.
Tesla Inc (TSLA.O) tumbled 14.1% and was the biggest drag on the Nasdaq after the electric carmaker softened its language once again on meeting its profit timeline after missing its quarterly financial targets.
Ford Motor Co (F.N) fell 6.9% after the automaker reported a lower-than-expected profit and gave a disappointing full-year earnings forecast.
“I don’t think it’s all too surprising that we’re getting a mixed bag of earnings and some pockets of weakness. The key for investors is if these pockets of weakness are a sign of an economic downturn or just a slow patch,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
In a bright spot, 3M Co (MMM.N) rose 3% 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 77% of the 138 S&P 500 companies that have reported so far have topped earnings estimates, according to Refinitiv data.
Overall earnings, however, are now expected to fall 0.1%, compared with a prior estimate of a rise of about 1%.
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 9:54 a.m. ET, the Dow Jones Industrial Average .DJI was down 146.27 points, or 0.54%, at 27,123.70, the S&P 500 .SPX was down 15.93 points, or 0.53%, at 3,003.63. The Nasdaq Composite .IXIC was down 70.54 points, or 0.85%, at 8,250.97.
Facebook Inc (FB.O) reversed premarket gains to trade 1.5% 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 (ALGN.O) plunged 24.3% and was the biggest percentage loser on the S&P 500, as the orthodontic device maker gave a current-quarter revenue and profit outlook that came below estimates.
Declining issues outnumbered advancers for a 2.08-to-1 ratio on the NYSE and for a 2.07-to-1 ratio on the Nasdaq.
The S&P index recorded 18 new 52-week highs and one new low, while the Nasdaq recorded 47 new highs and 26 new lows.
Reporting by Amy Caren Daniel in Bengaluru; Editing by Shounak Dasgupta and Maju Samuel