Finansnyheder

US stock indexes waver on mixed earnings; Alphabet down

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Via AP Business

Major U.S. stock indexes were mostly lower late Tuesday afternoon after a day of mostly sideways trading as investors sized up a mixed batch of corporate earnings reports.

Google’s parent company, Alphabet, led a slide in communications services stocks after the search giant reported a slowdown in revenue growth. Retailers, hospitality industry companies and banks also fell. Household goods makers, health care stocks and utilities notched gains.

The market’s gyrations had the benchmark S&P 500 index market on track for its first decline after two days of gains.

Alphabet is one of many huge U.S. companies to report their results this week, giving investors plenty to focus on. Nearly a third of the companies in the S&P 500 are scheduled to report their results for the first quarter this week. For the most part, the first-quarter earnings, while mixed, have come in better than the modest expectations analysts had.

General Electric, which has taken a beating in recent years, rose sharply in heavy trading after delivering surprisingly good earnings. That helped lift other industrial stocks.

Despite the market’s slide, the S&P 500 and Nasdaq remain close to all-time highs set on Friday. The market has been riding high this year after mounting a big comeback from a steep slump at the end of 2018. Investors have been feeling more optimistic this year as fears of a global economic recession eased and negotiations between the U.S. and China over their costly trade war appear to be making progress.

The Federal Reserve has done the most to allay the market’s jitters this year by signaling that it may not raise interest rates at all in 2019 after seven increases the previous two years.

Traders will get to hear from the Fed again on Wednesday, when the central bank’s policymakers issue another update on interest rate policy and their view on the U.S. economy.

KEEPING SCORE: The S&P 500 was down less than 0.1% as of 3:43 p.m. Eastern Time. The Dow Jones Industrial Average fell 9.25 points, or less than 0.1%, to 26,563. The Nasdaq composite slid 0.8% and the Russell 2000 index of smaller company stocks dropped 0.5%.

Major indexes in Europe finished mostly higher.

BAD SEARCH: Google parent company Alphabet slumped 7.8% in heavy trading after disappointing advertising sales held back revenue growth during the first quarter.

The search engine’s revenue fell short of analysts’ forecasts because advertising revenue only grew by 15%. The company is in tight competition for digital ads with Facebook and Amazon.

DENTED FENDER: General Motors fell 2.4% after reporting a surprise drop in sales during the first quarter. The company raised prices on its vehicles, especially trucks, during the quarter.

The automaker has been criticized for its decision to late last year to shut four U.S. factories and one in Canada. It said the closings and job cuts are necessary to stay financially healthy.

MORE POWER: Industrial conglomerate General Electric climbed 4.3%, also in heavy trading, after beating Wall Street’s profit and revenue forecasts for the second straight quarter.

The company has been shedding units and reorganizing as it tries to increase growth. Solid results from its struggling power unit helped lift its results during the most recent quarter.

ROADHOUSE BLUES: Restaurant operator Texas Roadhouse slumped 10.9% after profit fell because of higher labor costs. Both profit and revenue fell short of forecasts.

The company, which operates about 580 Texas Roadhouse and Bubba’s 33 restaurants, doesn’t expect those costs to fall. It raised prices earlier this year to try and offset the higher costs.

IN GOOD HEALTH: Health care stocks bounced back after wobbling in early trading following a mixed batch of earnings reports from some of the sector’s big names.

Merck rose 2.1% after reporting that its profit quadrupled in the first quarter, easily beating Wall Street’s forecasts. Pfizer, another huge drugmaker, gained 3% after higher sales of prescription drugs helped it report a 9% jump in profits, also easily beating forecasts.

Eli Lilly slid 2.4% after the drugmaker cut its revenue forecast for the year as it faces price declines and more competition for its drugs.

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AP Business Writer Damian J. Troise contributed to this report.


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