By Anna Hirtenstein and Akane Otani
U.S. stocks wobbled Tuesday, pressured by a string of mixed
earnings reports from companies ranging from airlines to banks.
Uncertainty about a second wave of coronavirus infections and
the extent to which governments may have to renew restrictions to
control the spread is weighing on investors' minds as the
third-quarter earnings season kicks off.
Investors say that while support from the Federal Reserve helped
the market climb out of the lows it hit earlier in the year, the
economy's recovery will likely be uneven and prolonged.
"Getting back to growth levels that we're used to historically
is going to take some time," said Zach Abraham, chief investment
officer of Bulwark Capital Management.
He added that the tumult of the past few months has created some
potential buying opportunities for the firm within beaten-down
sectors like retail.
The Dow Jones Industrial Average fell 157.71 points, or 0.5%, to
28679.81, snapping a four-session streak of gains.
The S&P 500 lost 22.29 points, or 0.6%, to 3511.93 and
Nasdaq Composite edged down 12.36 points, or 0.1%, to 11863.90.
Earnings drove swings within the industrial sector Tuesday, with
Delta Air Lines shares falling 87 cents, or 2.7%, to $31.77 after
it posted a steep drop in sales for the most recent quarter and
warned that the coronavirus would likely cut into demand for travel
Other airline stocks fell in tandem, with American Airlines
dropping 70 cents, or 5.4%, to $12.22 and United Airlines Holdings
slipping $1.12, or 3.1%, to $35.26.
Financial stocks also came under pressure following a string of
JPMorgan Chase shares fell $1.66, or 1.7%, to $100.78 after it
posted earnings above expectations, but also said it would extend
the suspension on stock repurchases at least through the end of the
Shares of Citigroup lost $2.20, or 4.8%, to $43.68, posting
their biggest one-day percentage decline in about a month, after
the bank reported profit declined 34% from the same period last
BlackRock bucked the trend, though, adding $24.07, or 3.9%, to
$638.96 after it reported a third-quarter profit that was above
expectations and revenue that rose above forecasts.
News about potential vaccines for the coronavirus also moved
Johnson & Johnson shares slid $3.48, or 2.3%, to $148.36
after it halted its coronavirus vaccine trials due to a participant
becoming unexpectedly sick, prompting fresh speculation about when
immunization shots may become widely available. The company also
raised its full-year expectations for adjusted operational sales in
its earnings report.
J&J's vaccine is one of the most advanced Covid-19 shots in
development and is among just a handful that had entered the last
stage of testing in the U.S. The company said Tuesday that it hoped
to figure out whether it would be able to resume the trial within a
This is the second time such a trial has been put on hold over a
safety concern: AstraZeneca has since resumed its testing efforts
in the U.K., but its clinical trials in the U.S. remain
"It's a reminder that while we have this race to get a vaccine,
it could actually take longer," said Paul Jackson, global head of
asset-allocation research at Invesco.
People are also being too optimistic over how quickly a vaccine
can halt the pandemic, he cautioned.
"If we get one through the trials and authorized, that would be
a great step, but then it will still take quite some time to get it
widely distributed," he said.
Overseas, the pan-continental Stoxx Europe 600 fell 0.6%.
In Asia, most major benchmarks were mixed. The Shanghai
Composite Index was flat after trade data showed that Chinese
exports rose nearly 10% in September, reflecting a continuing
recovery. Markets in Hong Kong were closed due to Tropical Storm
Nangka being slated to hit the city.
The International Monetary Fund also released an updated outlook
for global economic growth, as finance ministers and central
bankers gather virtually for the IMF and World Bank's annual
meetings. It raised its forecasts for 2020, saying that it now
expects the downturn to be less severe than it thought in June.
Write to Anna Hirtenstein at email@example.com and Akane
Otani at firstname.lastname@example.org
(END) Dow Jones Newswires
October 13, 2020 17:07 ET (21:07 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.