Wall Street recedes from record high following weak results, Draghi - Metro US

Wall Street recedes from record high following weak results, Draghi

By Noel Randewich

By Noel Randewich

(Reuters) – Wall Street fell from record highs on Thursday following a flurry of downbeat quarterly results from Ford Motor and other companies and after European Central Bank chief Mario Draghi’s comments disappointed investors hoping for a more dovish stance on monetary policy.

The ECB signaled its intention to explore monetary easing but did not cut interest rates, and President Mario Draghi sounded more upbeat on the economy than investors expected.

The Federal Reserve is widely expected to cut interest rates next week to bolster the U.S. economy, even as the U.S. unemployment rate sits at its lowest in 50 years.

“The ECB’s rosier outlook may be giving the market a bit of a chill,” said Chuck Carlson, chief executive of Horizon Investment Services in Hammond, Indiana.

“The market continues to hope for dovish central banks and the actions of one central bank lead the market to wonder what that means for the Federal Reserve.”

Ford Motor Co tumbled 8.6% after the automaker reported a lower-than-expected profit and gave a disappointing full-year earnings forecast.

The S&P 500 information technology index <.SPLRCT> fell 0.6%, with the Philadelphia Semiconductor Index <.SOX> falling 1.6% from record highs.

Xilinx Inc tumbled 2.5% after the chipmaker gave a weak quarterly forecast, hit by the impact of U.S. restrictions on selling to Huawei Technologies Co Ltd.

Facebook Inc dropped 2.8% after the social media giant said new rules and product changes aimed at protecting user privacy would slow its revenue growth into next year.

Align Technology plunged 26% and was the biggest decliner on the S&P 500 after the orthodontic device maker’s current-quarter forecast came below estimates.

Two weeks into the second-quarter earnings season, about 75% of the 185 S&P 500 companies that have reported so far have topped profit estimates, according to Refinitiv data.

Broad expectations that the Fed would cut rates to counter the impact of a protracted trade war have helped Wall Street’s main indexes scale record levels this month.

At 2:42 pm ET, the Dow Jones Industrial Average <.DJI> was down 0.56% at 27,116.72 points, while the S&P 500 <.SPX> lost 0.49% to 3,004.7.

The Nasdaq Composite <.IXIC> dropped 0.86% to 8,249.89.

The S&P 500 and Nasdaq closed at record highs on Wednesday.

Google-parent Alphabet Inc was nearly flat ahead of its quarterly report after the bell. Amazon.com Inc fell 0.7% ahead of its report after the bell. Also reporting after the close, Intel was down 1.7%.

“You are probably looking at them as a bit of a bellwether for what’s going on in tech, which has been a great performance story so far this year. The market will key in on their stories,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management.

Declining issues outnumbered advancing ones on the NYSE by a 2.28-to-1 ratio; on Nasdaq, a 2.20-to-1 ratio favored decliners.

The S&P 500 posted 28 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 80 new highs and 77 new lows.

(Additional reporting by Amy Caren Daniel and Karina Dsouza in Bengaluru; Editing by Sonya Hepinstall)

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