U.S. stocks ended lower on Tuesday, led by declines in the Nasdaq, as investors were cautious before results from top tech and internet names and Wednesday’s Federal Reserve announcement. The TSX ended virtually unchanged.
Shares of Apple Inc, Microsoft Corp and Google parent Alphabet Inc, all set to report earnings after the bell, were down 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 nearly 2% following its results from late on Monday.
Shares of the heavily weighted tech and internet companies have run up recently and last week regained leadership in the market, putting their results in the spotlight even more.
“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.
Caution was also high 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.
Unofficially, the S&P/TSX Composite Index closed up 8.39 points, or 0.04%, at 20,173.35, the Dow Jones Industrial Average fell 101.19 points, or 0.29%, to 35,043.12, the S&P 500 lost 20.6 points, or 0.47%, to 4,401.7 and the Nasdaq Composite dropped 180.14 points, or 1.21%, to 14,660.58
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 sectors for the day, and U.S. Treasuries prices rose. In late afternoon trading, the U.S. 10-year Treasury yield slid to 1.239% from 1.276% late on Monday. Canadian bond yields were also lower.
The yield on 10-year Treasury Inflation-Protected Securities (TIPS) plunged to a record low of -1.147% for a second straight session as investors bought TIPS on concerns about the prospect of steeper consumer prices going forward. The yield was last at -1.117%.
“With the increased uncertainty from China and the Delta variant, the markets are taking a breather from last week’s reversal on rates and equity prices,” said Ellis Phifer, managing director of fixed income at Raymond James in Memphis, Tennessee. “Maybe it’s the pause that refreshes.”
The energy sector was the weak spot for the TSX, with a decline of more than 2%.
Intel Corp shares sank 2% after it said its factories would start building Qualcomm chips and laid out a road map to expand its new foundry business.
Reuters, Globe staff
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