Wall Street’s main indexes on Tuesday slipped from all-time highs set in the previous session, after a slump in the shares of Google-parent Alphabet following a revenue miss and a drop in Apple ahead of its results.
The S&P 500 and the Nasdaq broke above record levels on Monday as investors took comfort from a largely positive earnings season, benign inflation data and hints of progress in U.S.-China trade talks.
Alphabet Inc shares tumbled 8.56% and were on track for their worst decline since December 2008, after the company also posted its slowest revenue growth in three years.
The S&P communication services sector slid 3%, the most among the 11 major S&P sectors and was on pace for its biggest percentage fall in over four months.
Apple Inc dropped 2.46% ahead of results later in the day, which will wrap up earnings for the high-growth FAANG stocks. Shares of Amazon.com Inc, Facebook Inc and Netflix Inc also slipped between 0.3% and 1.5%.
“People are definitely taking some profits off names like Apple, Google. There could be a little ‘peaking’ mentality here considering how indexes are at record levels, people tend to get a bit cautious,” said Jeremy Bryan, portfolio manager at Gradient Investments in Arden Hills, Minnesota.
“Large-cap companies have generally reported better-than-expected numbers but not the kind that would accelerate a rally.”
Limiting losses on the Dow Jones Industrial Average was Chevron Corp. The company’s shares rose 3.49% after Warren Buffett’s Berkshire Hathaway Inc put $10 billion behind Occidental Petroleum Corp’s bid for smaller rival Anadarko Petroleum Corp as it tries to see off competition from Chevron.
In a big day for healthcare, Pfizer Inc climbed 2.40% and Merck & Co Inc rose 1.21% after the drugmakers beat quarterly earnings estimates.
With over half of the S&P 500 companies reporting, analysts now expect a 0.7% rise in first-quarter profits, a stark reversal from a 2% fall estimated at the beginning of the month, according to Refinitiv data.
General Electric Co jumped 3.49% after the industrial conglomerate’s first-quarter profit rose and it lost less cash than expected.
Mastercard Inc rose 1.58% to a record high after the card company beat estimates for quarterly profit.
At 11:08 a.m. ET, the Dow was down 126.48 points, or 0.48%, at 26,427.91. The S&P 500 was down 18.59 points, or 0.63%, at 2,924.44 and the Nasdaq Composite was down 108.64 points, or 1.33%, at 8,053.22.