Stock

Market Snapshot: Dow for Day 2 as shares battle to get well from the underside line

U.S. stocks were on track for consecutive losses on Tuesday as concerns about rising coronavirus cases worldwide offset healthy U.S. corporate earnings reports for the first quarter.

What do major indices do?

The Dow Jones industrial average
DJIA
fell 288.82 points, or 0.9%, to 33,788.81.

The S&P 500
SPX
fell 36.60 points, or 0.9%, to 4,126.66.

The Nasdaq Composite
COMP
lose 180.82 points, or 1.3%, to trade at 13,733.95.

The small-cap Russell 2000
FURROW
slipped 2.5%.

Stocks took slight losses on Monday, with the Dow dropping 123.04 points, or 0.4%, while the S&P 500 fell 0.5% as both indices fell from record levels released on Friday. The Nasdaq Composite lost 1%.

What is driving the market?

While most companies beat estimates for first quarter earnings in the first week of the quarterly reporting season, stocks took a breather after hitting the records last week.

“The stocks are falling again today without any clear catalysts. The markets are a bit stretched at this point so we can see the stocks take a small step back here and there. This is normal and we expect every dip to be bought quickly, ”said Callie Cox, Senior Investment Strategist at Ally Invest.

Earnings reports, which got off to a strong start to the quarter, continue to be scrutinized as investors assess the strength of the economic recovery from the COVID-19 pandemic, analysts said. Companies' guidance on the outlook for the coming year could be even more important in determining market direction.

"The company outlook may indicate whether the rally from last year's lows could continue," Charalambos Pissouros, senior market analyst at JFD Group, said in a note.

Read: Why it may be early on for stock market inflation trading

“We believe that most of the major central banks are suggesting that spikes in inflation this year are likely to be temporary, and that we continue to strive to keep their monetary policies extra loose. Good chance for stocks to rally again and beyond Trending north, ”he said.

Check out: Oil prices turned negative a year ago: traders have learned that since then

However, according to analysts, an increase in new COVID-19 cases worldwide is having a negative impact on sentiment. The World Health Organization warned that global coronavirus infections would peak in the pandemic. According to the Washington Post, global daily new releases nearly hit a record of more than 750,000 on Sunday and Monday as India and Brazil remain hotspots. The US has seen an average of 67,175 new cases per day for the past week, up 4% from the average two weeks ago, but roughly 50% of adults in the US have now received a vaccine.

See: Why the surge in COVID-19 cases keeps Morgan Stanley optimistic on risky assets

"There are growing concerns that the spread of Covid outside the US could hamper the global economic recovery and undermine the guidance of US companies – especially multinationals," said Fiona Cincotta, senior financial markets analyst at City Index, in a note .

Which companies are in focus?

Apple Inc.
AAPL
Tuesday, along with other new products, was expected to provide an annual update for high-end iPads and introduce a paid subscription option on its podcast app when an event takes place in New York. Apple shares fell 1.7%.

Shares of International Business Machines Corp.
IBM
rose 4.5% after the tech giant topped Wall Street estimates with a surprise jump in sales and posted a four-quarter drop in sales.

United Airlines Holdings Inc.
UAL
More than $ 1.3 billion was lost in the first three months of 2021. However, executives said an adjusted cash flow metric turned out positive, promising that new international routes to countries that allow vaccinated travelers will help the airline recover from the devastation of the COVID-19 pandemic. Stocks fell more than 9%.

Johnson & Johnson
JNJ
On Tuesday, first quarter earnings and sales were reported that exceeded expectations. They pointed to the strength of the pharmaceuticals business and the ongoing recovery in medical devices. The shares rose 2.6%.

Shares of Abbott Laboratories
ABT
declined 4.2%, despite the company delivering results that exceeded earnings expectations in a quarter when its COVID-19 testing sales accounted for 20% of total sales.

Shares of Procter & Gamble Co.
PG
rose 1.3% after the consumer staples maker reported a third quarter profit that beat estimates and would raise prices for certain categories of products.

Shares of Kansas City South
KSU
rose 15% after the Wall Street Journal reported it Canadian National Railway Co.
CRF

CA: CNR
planned a takeover bid for the railroad operator worth around $ 30 billion that would top it off Canadian Pacific Railway Ltd.
CP

CA: CP
previously agreed takeover offer.

Shares of Philip Morris International Inc. PM rose 2.7% after the cigarette seller reported first-quarter profits and sales that exceeded expectations as growth in heated tobacco unit shipments helped offset declines in cigarette shipments.

See: Tobacco stocks are being incinerated after reports that administration of Biden may require nicotine reductions

What are other markets doing?

The yield on the 10 year Treasury bill
BX: TMUBMUSD10Y
fell 3 basis points to 1.57% after yields fell from their 14-month highs after a recent short covering rally. Yields and bond prices are moving in opposite directions.

The ICE US dollar index
DXY,
A measure of the currency versus a basket of six major competitors rose 0.1%.

Oil futures rose against the US benchmark
CLM21
up 1.6% at $ 62.39 a barrel.

Gold futures
GC00
erased early weakness to thrust higher, rising 0.5% to $ 1,780 an ounce.

In Europe the Stoxx is 600
XX: SXXP
and London's FTSE 100
United Kingdom: UKX
both fell by around 2%.

In Asia, the Hang Seng Index in Hong Kong
HK: HSI
rose 0.1% while the Shanghai Composite
CN: SHCOMP
fell 0.1% and the Japanese Nikkei 225
JP: NIK
decreased by 2%.

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