U.S. stock-index benchmarks on Tuesday traded lower, but were off the worst levels, as investors grappled with shaky economic reports, a collapse of the Senate health-car bill and corporate results that, although better than expected, raised some doubts about the earnings outlook.
In corporate news, Netflix’s earnings-driven leap was offset by a decline in shares of Goldman Sachs Group Inc.’s GS, -2.31% stock, which dropped 2.5% after quarterly results that showed a 40% decline in an important segment of trading.
The S&P 500 index SPX, -0.13% was down by 2 points, or 0.1%, at 2,456, with most of its sectors trading in negative territory. Financials and health-care stocks led losses, down 0.6%, while consumer-discretionary and utility shares rose 0.4%
“Investors are taking a pause here as they realize that the failure to pass the health-care bill means the tax reform is delayed. But at the moment, earnings and still growing economy is enough to support equities,” said Diane Jaffee, senior portfolio manager at TCW.
The Dow Jones Industrial Average DJIA, -0.43% most recently was down 89 points, or 0.4%, to 21,542. The price-weighted gauge was being weighed down by Goldman Sachs and UnitedHealth Group Inc. UNH, -0.67%
The Nasdaq Composite Index COMP, +0.15% was up 10 points, or 0.2%, at 6,324, above its record close set June 8.
The dollar DXY, -0.55% fell earlier Tuesday against its main rivals after Republican leaders in the Senate late Monday ditched their effort to repeal and simultaneously replace Obamacare, also known as the Affordable Care Act.
Still, some investors appeared mostly bullish about recent quarterly results and economic environment.
“The market is responding to earnings releases this week, but the bigger picture remains positive: low inflation, low interest rates, weaker dollar and a benign economic environment all bode well for stocks,” said Maris Ogg, president at Tower Bridge Advisors.
She said signs of global strength were also heartening.
“European economy is growing, China is growing and companies are making money, which suggests that earnings growth for next year looks good,” Ogg said.
Despite modest losses on Tuesday, the main indexes were hovering near record levels set last week.
Ogg said the stock market hasn’t been relying on sweeping reforms from President Donald Trump’s administration, including tax cuts, regulation and infrastructure spending, which is why the reaction in equity markets to the collapse of the health-care bill has been muted, so far.
“Even though we haven’t seen any specific reforms yet, this administration is still very business-friendly, which has not gone unnoticed by stock investors,” she said.
Individual movers: Shares in Netflix NFLX, +13.77% jumped after the streaming giant late Monday posted larger-than-expected growth in subscribers while reporting quarterly earnings. The stock climbed nearly 11% for the S&P 500’s biggest gain.
Read: Netflix hits another major milestone, stock heads for records
And: It may be time to tread carefully with Netflix shares
But Harley-Davidson shares HOG, -8.34% fell more than 11%, as the motorcycle maker’s better-than-expected earnings for the second quarter were overshadowed by lowered guidance for the year.
Bank of America BAC, -0.83% gave up 1.4% as the banking giant’s profit and revenue topped Wall Street’s estimates, but trading slumped.
UnitedHealth posted quarterly profit that beat expectations and sales that matched forecasts, while Johnson & Johnson’s JNJ, +1.24% earnings beat but sales missed. Both stocks were down in early trade.
Charles Schwab Corp. SCHW, -1.20% shares slipped 1.2% after the discount broker reported a second-quarter profit that was in line with expectations.
Economic news: A June reading on U.S. import prices dropped by 0.2%. Separately, the monthly confidence gauge from the National Association of Home Builders fell two points to a reading of 64. June’s reading, initially reported as 67, was cut by one point.