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Wall St snaps five-day up streak as caution rises before tech earnings, Fed - Metro US

Wall St snaps five-day up streak as caution rises before tech earnings, Fed

FILE PHOTO: A street sign for Wall Street is seen outside of the New York Stock Exchange (NYSE) in New York City

NEW YORK (Reuters) – U.S. stocks fell on Tuesday, ending a five-day winning streak in the three major indexes, as investors were cautious before results from top tech and internet names and Wednesday’s Federal Reserve announcement.

The Nasdaq led the day’s declines, registering its biggest daily percentage drop since May 12, but the three indexes pared losses heading into the close and ended well off the lows of the session.

Shares of Apple Inc, Microsoft Corp and Google parent Alphabet Inc, which all reported earnings after the bell, dropped and weighed the most on the Nasdaq and S&P 500 along with Amazon.com Inc, which is expected to report results later this week.

Also, electric-car maker Tesla Inc fell 2%, a day after it posted a bigger-than-expected second-quarter profit but said a global chip shortage that led to temporary factory shutdowns for the automaker remains serious.

Shares of the heavily weighted tech and internet companies have run up recently and last week regained leadership in the market, putting their results even more in the spotlight.

“Expectations are so high. They’re going to have good numbers … but we are expecting much more or maybe they will talk down the second half of the year,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.

Adding to the cautious tone is the outlook for U.S.-listed Chinese stocks, he said. The shares including Baidu extended losses as fears over more regulations in the mainland persisted.

“There’s a fair amount of (U.S.) investors in those companies,” Nolte said.

Uncertainty also rose as the Fed began its two-day meeting, with investors looking for signs on when it intends to begin reining in its massive stimulus program.

The Dow Jones Industrial Average fell 85.79 points, or 0.24%, to 35,058.52, the S&P 500 lost 20.84 points, or 0.47%, to 4,401.46 and the Nasdaq Composite dropped 180.14 points, or 1.21%, to 14,660.58.

Graphic: Nasdaq retreats sharply from record highs: https://fingfx.thomsonreuters.com/gfx/mkt/mopanmqwnva/Pasted%20image%201627401270150.png

Helping to support the Dow, shares of McDonald’s Corp rose 1% ahead of its results due before the bell on Wednesday.

In another sign that investors were in a risk-off mood, defensive sectors such as real estate and utilities were the two best-performing S&P 500 categories for the day, and U.S. Treasuries prices rose.

Intel Corp shares dropped 2.1% after it said its factories would start building Qualcomm chips and laid out a road map to expand its new foundry business.

Volume on U.S. exchanges was 10.36 billion shares, compared with the 9.86 billion average for the full session over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 1.87-to-1 ratio; on Nasdaq, a 2.65-to-1 ratio favored decliners.

The S&P 500 posted 44 new 52-week highs and no new lows; the Nasdaq Composite recorded 39 new highs and 235 new lows.

(Reporting by Caroline Valetkevitch in New York; Additional reporting by Ambar Warrick in Bengaluru; Editing by Maju Samuel and Matthew Lewis)

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