Equities dip as earnings weigh; Fed statement on deck

Reuters

3 days ago

NEW YORK, July 29 (Reuters) - The S&P 500 and the Nasdaq retreated from record highs on Tuesday as some corporate earnings disappointed, as investors waded through the latest round of economic data ahead of a Federal Reserve policy statement.
A host of Dow components reported earnings, with UnitedHealth (UNH.N), opens new tab, Boeing (BA.N), opens new tab and Merck (MRK.N), opens new tab all trading lower after their quarterly results.
Health insurer UnitedHealth fell 5.2% as the biggest drag on the Dow after a disappointing profit forecast, while Boeing lost 3.7% despite reporting a smaller second-quarter loss.
Merck shed 2.6% after the drugmaker reported its quarterly results and said it was extending its pause on shipments of HPV vaccine Gardasil to China until at least the end of 2025 due to persistent weakness in demand.
"Earnings have been a bit of a mix. Economic data has been somewhat mixed too, but not enough to move the needle in terms of the Fed," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
"The next two days, you have Microsoft, Meta, Apple, Amazon - those are big companies, and they will move markets depending on how the earnings are and how the outlooks are."
Earnings from megacaps Meta (META.O), opens new tab, Microsoft (MSFT.O), opens new tab, Amazon (AMZN.O), opens new tab and Apple (AAPL.O), opens new tab are scheduled later this week and are likely to have a strong impact on market direction.
The Dow Jones Industrial Average (.DJI), opens new tab fell 228.54 points, or 0.51%, to 44,608.93, the S&P 500 (.SPX), opens new tab lost 17.15 points, or 0.27%, to 6,372.62 and the Nasdaq Composite (.IXIC), opens new tab lost 51.25 points, or 0.24%, to 21,127.34.
United Parcel Service (UPS.N), opens new tab shares plunged 9.3% as the package delivery company posted earnings and again declined to issue annual revenue and margin forecasts, deepening concerns that U.S. President Donald Trump's continually changing trade policy is weighing on the company.
The Dow Jones Transport average (.DJT), opens new tab fell 2.2% and was on track for its biggest daily percentage decline since late May.
Likewise, Whirlpool (WHR.N), opens new tab plummeted more than 12% after the home appliances maker slashed its annual earnings forecast and dividend, as the appliance maker cited pressure from a pull-forward in imports by rivals ahead of Trump's tariffs.
With nearly 200 S&P 500 components having reported earnings, 79.7% have topped analyst expectations, according to LSEG data, compared with a 6.3% beat rate over the last four quarters.
On the economic front, consumer confidence in July increased more than expected to 97.2. In June, U.S. job openings and hiring, or JOLTS data, had decreased, pointing to a further slowdown in labor market activity.
The JOLTS report was the first in a string of data on the labor market this week, culminating in Friday's government payrolls report.
The Fed is expected to leave rates unchanged at its policy announcement on Wednesday and traders will closely analyze remarks by Fed Chair Jerome Powell to gauge the timing of any potential rate cuts.
The S&P had notched a sixth straight closing record high on Monday, after a U.S.-EU trade deal that halved tariffs to 15% and boosted expectations of more agreements ahead of Trump's August 1 deadline. Trump has also floated a potential "world tariff" of 15% to 20% for non-negotiating countries.
Key negotiations between the U.S. and China completed their second day in Stockholm as the world's two leading economies aim to resolve their trade conflict, with Trump saying he was told by Treasury Secretary Scott Bessent that he had a very good meeting with Chinese officials.
Declining issues outnumbered advancers by a 1.02-to-1 ratio on the NYSE and by a 1.98-to-1 ratio on the Nasdaq.
The S&P 500 posted 32 new 52-week highs and nine new lows, while the Nasdaq Composite recorded 71 new highs and 67 new lows.