By Mark DeCambre, MarketWatch , Joy Wiltermuth
Shares of Facebook, Twitter, Snap fall after bill to help
consumers migrate data to rival platforms emerges
U.S. stocks closed lower Tuesday as investors digested a torrent
of corporate earnings reports and a new bill to make it easier for
social media users to migrate away from industry heavyweights
Facebook, Snap and Twitter to rival platforms.
The four members of the Dow Jones Industrial Average that
reported third-quarter earnings on Tuesday resulted in a net
negative for the stock market, as disappointing numbers from (MCD)
orp. and Travelers (TRV) outweighed beats from United Technologies
(UTX) and Procter & Gamble (PG).
Investors also watched fresh Brexit developments after the U.K.
parliament voted Tuesday to consider Prime Minister Boris Johnson's
plan for leaving the European Union, but rejected his rapid
timetable for the proposed split.
Read: Dow components McDonald's and Travelers disappoint on
earnings, offsetting P&G and United Technologies' gains.
(http://www.marketwatch.com/story/dow-components-mcdonalds-and-travelers-disappoint-on-earnings-offsetting-pg-and-united-techs-gains-2019-10-22)
(https://www.vox.com/2019/10/22/20926907/brexit-news-program-motion-parliament-fail)
How did major indexes perform?
The S&P 500 index fell 10.73 points, or 0.36%, to 2,995.99.
The Nasdaq Composite Index shed 58.69 points, or 0.72%, to
8,104.30. The Dow Jones Industrial Average lost 39.54 points, or
0.15%, to 26,788.10, on the back of worse-than-expected
third-quarter results from McDonald's and Traveler Cos
(http://www.marketwatch.com/story/dow-components-mcdonalds-and-travelers-disappoint-on-earnings-offsetting-pg-and-united-techs-gains-2019-10-22).
On Monday, the Dow ended the day 57.44 points, or 0.2%, higher
at 26,827.64, weighed by a decline in shares of Boeing Co.'s stock
(BA), following a report on Friday that said the company may have
misled federal aviation authorities
(http://www.marketwatch.com/story/boeing-stock-at-its-lowest-in-two-months-after-report-jet-maker-may-have-misled-faa-2019-10-18)
about the safety of the 737 Max jet.
The S&P 500 index rose 20.52 points, or 0.7%, to end at
3,006.72, leaving it 0.6% away from its record closing high of
3,025.86 set on July 26. The Nasdaq Composite Index climbed 73.44
points, or 0.9%, to finish at 8,162.99, about 2% from its July
peak.
What drove the market?
Investors were keeping a close eye on Tuesday's deluge of
corporate results, including about 20 percent of the S&P 500
index components this week and four Dow components that reported
early Tuesday.
"Earnings have been mixed, but I still believe they're going to
surprise to the upside," said Ken Engelke, chief economic
strategist at Capitol Securities Management, in an interview.
Engelke sees promise in value stocks, but more ominous tones for
growth and technology sectors, where social media companies, in
particular, could suffer from "regulatory overreach."
S&P 500 index companies for the third quarter are likely to
report a year-over-year decline in earnings of 4.7%, but
year-over-year growth in revenues of 2.6%, with a possible net
profit margin of 11.3%, which would be the first time index
companies have reported three straight quarters of year-over-year
declines in net profit margin since Q1 2009 through Q3 2009,
FactSet analyst John Butters said.
But through Tuesday morning 19% of S&P 500 index companies
have reported quarterly numbers and 80% have beaten earnings
estimates.
In economic data, investors received an update on the health of
the U.S. housing market with existing-home sales for September
falling by 2.2%
(http://www.marketwatch.com/story/existing-home-sales-dip-22-in-september-as-buyers-face-limited-inventory-2019-10-22)
to an annualized pace of 5.38 million.
On the international trade front, President Donald Trump said
Monday that talks between Washington and Beijing are going "very
well
(http://www.marketwatch.com/story/trump-says-us-china-trade-deal-coming-along-very-well-2019-10-21)."
Top trade negotiator Robert Lighthizer also said that the U.S. aims
to finish the first phase of talks by mid-November when the two
countries meet in Chile.
Shares of Facebook (FB), Snap (SNAP) and Twitter (TWTR) closed
lower Tuesday after a bipartisan group of senators
(http://www.marketwatch.com/story/senate-bill-aims-to-help-people-delete-facebook-by-making-data-more-portable-2019-10-22)
introduced legislation that would require social media platforms to
allow consumers easier ways to move their data to other sites.
Brexit also was back in the spotlight, after U.K. lawmakers
voted Tuesday to let Prime Minister Boris Johnson's Brexit plan to
proceed to the next step in Parliament, but rejected his rapid
timetable for approval, saying that more time was needed to
scrutinize the bill
(https://www.vox.com/2019/10/22/20926907/brexit-news-program-motion-parliament-fail).
"Honestly, the market certainly hopes this will get resolved and
we can put it behind us," said Jennifer Ellison, principal at B|O|S
in San Francisco and Silicon Valley, about the latest Brexit vote.
"It's been a headwind for two years."
Which stocks were in focus?
McDonald's Corp. stock (MCD) fell 5% after earnings and revenues
fell short of Wall Street estimates.
Travelers Cos. stock (TRV) tumbled
(http://www.marketwatch.com/story/travelers-stock-falls-after-earnings-miss-2019-10-22)
8% after the insurer saw earnings decline and fall short of
expectations.
Procter & Gamble Co. shares (PG) gained after the company
delivered its third-quarter results and dialed up its expectation
for 2020 sales growth, up 3% to 5% from previous guidance of 3% to
4% growth.
Shares of Dow-component United Technologies Corp.(UTX) rose
after the company beat earnings' expectations, and raised its
earnings outlook for 2019.
United Parcel Service Inc. stock (UPS) ended lower despite the
package-shipping company delivering third-quarter results that
outperformed analysts' consensus estimates.
Shares of Hasbro Inc. (HAS) sank Tuesday, after the toy maker
reported third-quarter profit and revenue that missed expectations,
as weakness in franchise brands and trade uncertainty offset
strength in partner brands.
Biogen Inc. shares (BIIB) rose 26% after the company filed for
regulatory approval for an Alzheimer drug called aducanumab
(http://www.marketwatch.com/story/biogens-stock-blasts-off-after-surprise-reversal-on-alzheimers-drug-earnings-beat-2019-10-22)
and the biotechnology company surprised investors by saying its
treatment was ready to start the regulatory approval process.
Under Armour Inc. (UAA)
(http://www.marketwatch.com/story/under-armour-names-patrik-frisk-ceo-succeeding-ceo-and-founder-kevin-plank-2019-10-22)(UAA)
stock rose after the sportswear brand announced CEO Kevin Plank was
stepping down
(http://www.marketwatch.com/story/under-armour-names-patrik-frisk-ceo-succeeding-ceo-and-founder-kevin-plank-2019-10-22)and
named Patrik Frisk its new chief effective as of Jan. 1, 2020.
JetBlue Airways Corp. (JBLU) shares gained after the airline
said Tuesday it had a net income of $187 million
(http://www.marketwatch.com/story/jetblue-shares-fall-premarket-as-earnings-beat-but-airline-offers-soft-guidance-2019-10-22),
or 63 cents a share, in the third quarter, up from $50 million, or
16 cents a share, in the year-earlier period.
Shares of Lockheed Martin Corp. (LMT) fell slightly after the
defense contractor reported third-quarter results, with sales
$15.17 billion, versus $14.32 billion a year ago, above the FactSet
consensus $14.87 billion.
Tile Shop Holdings(TTS) shares plunged after the company said it
would voluntarily delist its shares from the Nasdaq. The cost of
home-improvement materials have soared as a result of the
U.S.-China trade war. Tile's shares closed down 79%
year-to-date.
How did other markets perform?
The 10-year Treasury note yield fell 2.6 basis points to 1.768%
on Tuesday, its largest one-day drop since October 3, according to
Dow Jones Market Data.
West Texas Intermediate crude for November delivery gained
(http://www.marketwatch.com/story/oil-prices-set-for-second-skid-in-a-row-as-investors-fret-about-crude-demand-2019-10-21)
85 cents, or 1.6%, to trade at $54.16 a barrel on the New York
Mercantile Exchange.
Gold for December delivery on Comex fell 60 cents, or 0.04%, at
$1,487.50 an ounce, after slipping 0.4% to settle at $1,488.10 an
ounce on Monday.
The ICE U.S. Dollar Index , which tracks the performance of the
greenback against six major rivals, rose about 0.06% to 97.39.
Global equities saw gains. The Stoxx Europe 600 rose 0.2%. In
Asia, China's CSI 300 index finished up 0.4% and the Shanghai
Composite Index gained 0.5%, while Hong Kong's Hang Seng Index
advanced 0.2%.
(END) Dow Jones Newswires
October 22, 2019 16:57 ET (20:57 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.