U.S. stocks were under pressure midday Tuesday, as the Federal Reserve began a two-day meeting and investors digested global economic data and a smorgasbord of corporate results, including disappointing sales figures from the parent of internet search giant Google.
What are indexes doing?
The Dow Jones Industrial Average DJIA, -0.08% fell 60 points to 26,495, a decline of 0.2%, while S&P 500 index SPX, -0.23% lost 13 points, or 0.5%, to 2,930. The Nasdaq Composite Index NQM9, -0.52% was down 101 points, or 1.2%, at 8,062.
The S&P 500 and the Nasdaq Composite each edged higher Monday to post record finishes. That followed on record closes from Friday and marked the first back-to-back set of all-time closing highs for both since August. The Dow also eked out a rise on Monday, gaining 11.06 points to finish around 1% below its all-time closing high of 26,828.39 set on Oct. 3.
What’s driving the market?
Federal Reserve policy makers are fully expected to leave interest rates on hold but the statement and remarks by Fed Chairman Jerome Powell will be closely watched for clues to the central bank’s future plans, after it abruptly paused its plan for rate increases in January and subsequently took action to halt the wind-down of its balance sheet.
Read: Powell faces tough test Wednesday as market is uneasy with his recent communication
A private gauge of China factory activity weakened in April but still showed expansion, in line with official data that also showed slower growth. The Caixin China manufacturing purchasing managers index dropped to 50.2 in April from 50.8 in March, holding above the 50 level that indicates an expansion in activity. Earlier, the official manufacturing PMI fell to 50.1 in April from 50.5 in March.
Meanwhile, the eurozone regained some lost momentum at the start of 2019, according to Tuesday data, which showed combined gross domestic product for the 19-nation region rose by an annualized 1.5% in the first quarter, accelerating from a 0.9% growth rate in the final quarter of 2018.
What companies are in focus?
Shares of Google parent Alphabet Inc. GOOG, -7.74% GOOGL, -7.68% were down more than 8% Tuesday, after its results late Monday showed revenue growth cooled off in the first quarter, with all major sales categories performing slightly worse than projected.
Opinion: Google sales growth is slowing, and it sure would be nice to know why
Shares of General Electric Co. GE, +3.55% jumped more than 4%, after topping Wall Street’s first-quarter profit and revenue expectations.
Occidental Petroleum Corp. OXY, -2.25% shares were in focus Tuesday, after the company said that Warren Buffett’s Berkshire Hathaway Inc. BRK.B, -0.36% has committed to a preferred equity investment of $10 billion, in connection with the oil company’s proposal to acquire Anadarko Petroleum Corp. APC, -0.56%
McDonald’s Corp. MCD, +0.63% stock rose 1% Tuesday, after the fast-food giant and Dow component reported global, same-store sales growth of 5.4%, above analyst forecasts, but earnings that fell short.
Shares of General Motors Co. GM, -2.71% fell 3% after the auto maker reported first-quarter earnings that beat expectations, but revenue fell more than expected.
Perrigo Co. PLC PRGO, -7.76% shares fell 7.8% Tuesday, after the company disclosed in a regulatory filing that the IRS claims it owes $843 million in unpaid taxes, including a 40% penalty, related to its 2013 acquisition of Elan Corp.
Merck & Co. Inc. MRK, +1.75% shares rose 0.2%, after the drug company posted stronger-than-expected first-quarter earnings and raised guidance for the full year. Fellow Dow component and pharmaceutical giant Pfizer Inc. PFE, +3.36% also surpassed Wall Street forecasts for the first quarter, while raising it’s guidance. Shares rose 1.4% Tuesday.
Ely Lilly & Co. LLY, -2.47% stock declined 3.2% early Tuesday, after the drug giant reported first-quarter earnings that topped expectations, but revenue that missed.
Mastercard Inc. MA, +1.85% stock rose 1.9% early Tuesday, after the credit card network surpassed earnings and revenue expectations for the first quarter.
Shares of ConocoPhillips COP, +1.04% rose 0.5% Tuesday after the oil company reported better-than-expected profit for the first quarter.
Lumber Liquidators Holdings Inc. LL, +3.13% shares rose 2%, even after the wood flooring retailer posted a first-quarter loss and sales that fell short of expectations.
Apple Inc. AAPL, -2.03% is due to report earnings after the closing bell.
Read: Apple earnings: How much of its massive cash pile will go into investors’ pockets?
What are the analysts saying?
“We’re knee-deep in earnings season now, and today’s reports are a mixed bag,” Patrick Healey president of Caliber Financial Partners told MarketWatch, noting that results from Alphabet were in contrast to those of fellow online ad giant, Facebook Inc. FB, +0.11% which surpassed investor expectations last week, and that Eli Lilly’s results Tuesday morning were more disappointing than rivals Pfizer and Merck.
“We’re near all-time highs, and investors are waiting for a catalyst to drive the market in the second half” of 2019, he added.
What’s on the economic calendar?
The employment cost index rose by 0.7% during the first three months of the year, in line with economists expectations, per a MarketWatch poll. Year-over-year compensation growth advanced 2.8%, a tick down from the annual rate during the last three months of 2018.
The Case-Shiller house price index for February showed growth slowed to a 6½-year low, while the Chicago-area purchasing managers index for April is set for release at 9:45 a.m.
The Conference Board said it’s consumer-confidence index rose to 129.2 in April from 124.2 a month earlier. A National Association of Realtors index of pending home sales surged 3.8% in March, versus a forecast for a 0.7% rise.
How are other markets trading?
Asian stock markets closed on a mixed note Tuesday, with the Shanghai Composite Index SHCOMP, +0.52% and the Shenzhen Composite index 399106, +0.68% both closing higher, despite new data showing a slowing Chinese manufacturing sector.
Hong Kong’s Hang Seng Index HSI, -0.65% meanwhile, fell 0.7% while South Korea’s SEU, -0.58% also retreated on the day. In Europe, stocks were mostly lower, with the Stoxx Europe 600 SXXP, +0.01% down 0.1%
The price of oil CLM9, +0.91% surged Tuesday morning before reversing course, and is down 0.1% on the day to $63.44 per barrel. Gold prices GCM9, +0.29% advanced, while the U.S. dollar edged lower.
