U.S. stocks fall as traders digest earnings reports

NEW YORK, Oct. 15 (Xinhua) — U.S. stocks ended lower on Tuesday, as traders sifted through the latest corporate earnings reports.
The Dow Jones Industrial Average fell 324.80 points, or 0.75 percent, to 42,740.42. The S&P 500 sank 44.59 points, or 0.76 percent, to 5,815.26. The Nasdaq Composite Index shed 187.10 points, or 1.01 percent, to 18,315.59.
Six of the 11 primary S&P 500 sectors ended in red, with energy and technology leading the laggards by dropping 3.04 percent and 1.79 percent, respectively. Meanwhile, real estate and consumer staples led the gainers by going up 1.23 percent and 0.64 percent, respectively.
So far, around 40 companies in the S&P 500 have reported third-quarter earnings, with 80 percent surpassing analyst expectations, according to FactSet. Wall Street has just come off a strong session that saw S&P 500 and Dow hit all-time highs, with the Dow closing above 43,000 points for the first time.
Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, warned that the market might face a pullback after reaching new highs.
He described the current environment as a “buy high, sell higher” market but expected that a solid third-quarter earnings season and strong fundamentals could help stocks remain elevated through the end of the year. “Near term, there’s much to like about the equity market. If you look toward the end of the year and beyond, we expect volatility to be more the norm versus exception.”
Also on Tuesday, San Francisco Federal Reserve President Mary Daly said there’s plenty of room to lower the central bank’s key interest rate from here. “We’re a long way from where it’s likely to settle,” she said. “So the decisions that are really in front of us are ones about how quickly to adjust towards that level. But it’s quite possible that we will have a neutral rate of interest that’s a little higher than the interest rate that we came in with.”
Investor sentiment is at its most bullish in over four years, driven by optimism around potential rate cuts from the Federal Reserve and economic stimulus in China, according to Bank of America (BofA) investment strategist Michael Hartnett.
The October BofA Global Fund Manager Survey revealed the largest surge in investor optimism since June 2020, with global growth expectations experiencing their fifth-largest increase since 1994. Notably, 74 percent of investors believed the United States will avoid a recession, while only 10 percent foresaw a weaker economy in the next 12 months.
On the corporate front, Walgreens’ stock jumped 15.78 percent, its best single-day percentage gain since Oct. 28, 2008, after the company announced a plan to close 1,200 stores in the next three years.
On the contrary, U.S.-listed shares of ASML Holding tumbled more than 16 percent on Tuesday, following an earlier-than-anticipated earnings release, in which ASML issued a disappointing sales forecast.
Citigroup’s third-quarter results surpassed Wall Street expectations, but the performance failed to ignite investor enthusiasm. Despite an initial rise in pre-market trading, shares of the bank fell 5.11 percent. ■