Wall Street markets ended the stock market session on Tuesday without a single direction, after the worse than expected financial results of Alphabet pushed the technology index Nasdaq down from its record levels.
The blue-chip index Dow Jones Industrial Average added 0.14% to 26,592.50 points, while the broader S&P 500 added 0.09% to 2,945.81 points. However, the S&P communication services sector slid 2.5%, dragged down by Alphabet, and registered its biggest percentage drop in about four months.
The technology benchmark Nasdaq Composite wiped out 0.7% to 8,107.77 points.
For the month, the Dow rose 2.6%, the S&P 500 gained 3.9% and the Nasdaq added 4.9%. All three indexes posted their best monthly percentage gains since January.
The S&P 500 now up 17.5% since the end of December.
The focus of investors this week will be the Federal Reserve meeting and the upcoming press conference on Wednesday. Analysts will expect to see whether the central bank will change its mitigating tone in terms of interest rate policy. Markets expect the Fed to step away from the spotlights and stay in the standby mode for the rest of the year. Stable Fed will lead to more stable markets.
Investors will also pay close attention to the next two rounds of U.S.-China trade negotiations after Treasury Secretary Steven Mnuchin said he hopes to make “substantial progress” with Chinese negotiators.
Meanwhile, a closely-followed leading indicator for the health of the US housing market perked up last month. The National Association of Realtors’ Pending Home Sales index jumped by 3.8% month-on-month in March to reach 105.8 (consensus: 1.0%), with contract signings growing by 1.2% in comparison to a year ago.
On the bonds market, the yields on 10-year and 30-year US Treasuries declined to 2.505% and 2.933%, respectively.
Corporate stocks performance
Alphabet, the parent company of Google, declined by 7.6%, marking its worst trading day since October 2012. This happens on the background of previously released quarterly earnings report of the technology giant, according to which the revenue reaches 36.34 billion USD at a projected 37.33 billion USD after weak Google sales.
The stock of McDonald’s and General Electric appreciated by 0.25% and 4.63% after strong earnings reports.
The pharmaceutical giants Pfizer and Merck boosted the Dow Jones index with respective gains of 3% and 2%. Both companies reported better-than-expected Q1.
Chevron also added 2%, thanks in part to a 0.6% rise in West Texas Intermediate crude prices. The oil sector was also supported by Warren Buffett’s Berkshire Hathaway Inc commitment of 10 billion USD to Occidental Petroleum Corp’s bid for Anadarko Petroleum Corp, boosting its chances of snatching a deal from Chevron.
Solaris Oilfield Infrastructure and Propetro Holding skidded 6% and 5%, respectively. Solaris extended its losing streak for a sixth session and is testing support at its 50-day line.
The gold miner Kirkland Lake Gold led the upside with a near 3% gain as it works on a new cup base.
Shares of the technology giant Apple fell by nearly 2% during the session before releasing the quarterly results. Among biggest losers today was UnitedHealth Group, which stocks were down by 2%.
Corporate earnings reports
More than half of the S&P 500 companies posted their quarterly results, with 77% of them over expectations.
McDonald’s, whose shares are within Dow Jones Industrial Average, reported earnings and profit for the quarter, which were above analysts’ expectations. Sales in fast food chains are up by 5.4%, well above the 3.4% predicted by experts.
General Electric also reported better than projected earnings figures in the first three months of the year. The company reported first-quarter 2019 earnings of 0.14 USD per share, better than Wall Street estimates. That’s good, but its cash flow is what matters now. General Electric cash flow numbers are far more important for investors as company management tries to turn around the fortunes of the 127-year old American industrial icon. GE burned through 1.2 billion USD in cash during the first quarter. Not great, but much better than Wall Street’s worst fears of 2-4 billion USD in cash usage.
General Motors relied on its pricey new pickups to drive profits in the first quarter of 2019 as the company saved 400 million USD on restructuring measures. Results were mixed. Despite challenges like full-size SUV production downtime, seasonal costs and volatility in China, GM’s new pickup trucks delivered strong performance. After taxes, GM’s first-quarter net income increased by 93% to 2.1 billion USD on 34.9 billion USD in revenue. The company’s after-tax earnings per share totalled 1.48 USD, up 92%. The Detroit automaker reported pre-tax earnings per share of 1.41 USD, down 1.4%. Pre-tax earnings were 2.3 billion USD in the first quarter, down 11.5% from the same quarter last year, amid restructuring activities and softer sales.