Wall Street pares losses but GE-led industrials weigh
Reuters
Published Jul 21, 2017 01:12PM ET
Wall Street pares losses but GE-led industrials weigh
By Tanya Agrawal
(Reuters) - U.S. stock indexes pared losses, helped by a rise in Visa in early afternoon trading on Friday, but weak earnings from industrial heavyweight General Electric weighed.
Shares of GE (N:GE) fell as much as 5.4 percent to their lowest level since Oct 2015, as the company reported a nearly 60 percent slump in profit and its 2017 profit forecast came in at the low end.
The stock's fall weighed on other industrials such as Caterpillar (N:CAT) and 3M (N:MMM).
Visa (N:V) rose 1.8 percent after the world's largest payments network operator raised its annual earnings forecast. The stock was the top boost on the Dow and the S&P.
"We've had a good run for the last few weeks and investors are primarily digesting earnings today," said Erick Ormsby, chief executive of Alcosta Capital Management.
"GE's results were okay but they guided lower and that's weighing on the market too."
Microsoft (O:MSFT) fell 0.7 percent, despite the company reporting strong fourth-quarter earnings.
Attention will turn to earnings from big tech names next week, including Amazon (O:AMZN), Alphabet (O:GOOGL) and Facebook (O:FB).
The Nasdaq came off its 10-day streak of gains, its best since February 2015, after closing at record levels on Thursday.
The tech sector, however, continues to be the best performing S&P sector this year, despite concerns over stretched valuation, as investors look for growth from sectors relatively immune to a policy gridlock in Washington.
"If tech earnings were to disappoint, it might finally be the thing that causes a correction, even if it's a small one," said J.J. Kinahan, chief market strategist at TD Ameritrade.
Still, overall earnings are expected to be good with analysts expecting earnings to have climbed 8.6 percent, above the 8-percent rise projected at the start of the month, according to Thomson Reuters I/B/E/S.
At 12:39 p.m. ET (1639 GMT), the Dow Jones Industrial Average (DJI) was down 52.63 points, or 0.24 percent, at 21,559.15, the S&P 500 (SPX) was down 2.98 points, or 0.12 percent, at 2,470.47.
The Nasdaq Composite (IXIC) was down 5.61 points, or 0.09 percent, at 6,384.39.
A rise in Netflix (O:NFLX) and biotech stocks Celgene (O:CELG) and Gilead (O:GILD) helped limit losses on the tech-heavy index.
The S&P and the Nasdaq are on track to close higher for the third straight week.
Nine of the 11 major S&P sectors were lower, with the industrials (SPLRCI) and energy sectors (SPNY) leading the decliners.
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Oil prices fell more than 2 percent after a consultancy report forecast a rise in OPEC production for July despite the group's pledge to curb output. [O/R]
Honeywell International (N:HON) rose 1.2 percent after the technology and manufacturing company raised the low-end of its profit forecast.
Declining issues outnumbered advancers on the NYSE by 1,651 to 1,119. On the Nasdaq, 1,601 issues fell and 1,158 advanced.
Written By: Reuters
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