Stocks Suffer Modest Losses
By Caitlin Ostroff and Amber Burton
U.S. stocks wobbled after major indexes hit records a day
earlier and investors readied for a slew of blue-chip earnings.
The S&P 500 fell 0.1% after hitting a new intraday record at
3870.90. The technology-focused Nasdaq Composite edged up less than
0.1%. The Dow Jones Industrial Average fell less than 0.1%.
This week marks the height of earnings season, with shares of
General Electric rallying 3.1% after the industrial conglomerate
reported forecast-beating fourth-quarter revenue and free cash
Johnson & Johnson rose 3.1% after it recorded stronger sales
in its latest quarter, as revenue gains from its pharmaceutical
division boosted its top-line results. Raytheon Technologies jumped
2.8% after the aerospace and defense company reported
fourth-quarter profit and revenue that beat expectations.
Starbucks, Microsoft and Texas Instruments will release results
after markets close. Major tech firms, including Apple, Tesla and
Facebook, will update investors Wednesday.
Investors will watch to see if earnings can continue to top
analysts' expectations, providing a further catalyst to push
"What's working in the market's favor is the overall trend of
economic growth is still robust and that's likely to translate to
positive earnings," said Shoqat Bunglawala, head of multiasset
solutions, international, at Goldman Sachs Asset Management.
"There's an expectation that there's going to be more robust growth
driven by pent up demand in the second half of the year."
Shares of GameStop rose 14% as individual traders, propelled by
social media, piled into the stock. Shares swung wildly Monday and
have gained more than 300% this year, in the latest sign that
frenetic trading by retail traders is leading to outsize market
Software and services firm BlackBerry, another favorite among
individual traders, fell 3.9%. Etsy fell 1.4% after an earlier rise
following Tesla Chief Executive Elon Musk tweeted "I kinda love
In bond markets, the yield on the benchmark 10-year U.S.
Treasury note ticked down to 1.035% from 1.038% Monday.
The Conference Board released its index Tuesday of consumer
confidence, which showed U.S. consumers' outlook on the economy
improved in January. Consumer confidence increased to 89.3 in
January from 87.1 in December.
"The Conference Board number was pretty similar to what we've
seen in a lot of other indications, which is current conditions are
pretty weak, but people's expectations are optimistic or positive,"
said Tom Hainlin, national investment strategist at U.S. Bank
Mr. Hainlin's focus remains on the vaccine rollout and the first
100-day agenda of the new Biden administration and what impact that
will have on big sectors in the economy.
U.S. home-price growth continued to accelerate toward the end of
2020, data out Tuesday showed. In the year to November, the S&P
CoreLogic Case-Shiller National Home Price Index, which measures
average home prices in major metropolitan areas, rose 9.5%.
The pan-continental Stoxx Europe 600 rose 0.6%. Shares of UBS
Group rose 2.6% after the Swiss bank announced a new buyback
program of up to $4.5 billion, having closed 2020 with a
consensus-beating quarterly performance.
Travel and transportation stocks were hit hard on concerns about
the speed of vaccine rollouts and the timing of some countries'
reopenings. Jet-engine maker Rolls-Royce was down 4.1% at its
lowest level of the year.
Indexes in Asia handed back some of the robust gains registered
in the first few weeks of this year. The Hang Seng Index in Hong
Kong dropped 2.6%, as heavyweight Tencent Holdings fell 6.3%,
retreating from a record high reached in the previous session. The
Shanghai Composite shed 1.5%, the Nikkei 225 retreated 1% and South
Korea's Kospi Composite lost 2.1%.
In a surprise move, the People's Bank of China withdrew 78
billion yuan, or the equivalent of $12 billion, from the Chinese
financial system through open-market operations Tuesday. The move
runs counter to expectations in the run-up to the Lunar New Year
holidays, when China's banking system usually needs more, not less,
Joanne Chiu contributed to this article.
Write to Caitlin Ostroff at email@example.com and Amber
Burton at Amber.Burton@wsj.com
(END) Dow Jones Newswires
January 26, 2021 13:23 ET (18:23 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.