Dow sinks on weak IBM, United Technologies earnings
NEW YORK–Disappointing earnings from IBM and United Technologies pummeled the Dow on Tuesday and led the broader market lower.
The Dow Jones Industrial Average tumbled 181.12 points (1 percent) to 17,919.29.
The broad-based S&P 500 dropped 9.07 (0.43 percent) to 2,119.21, while the tech-rich Nasdaq Composite Index fell 10.74 (0.21 percent) to 5,208.12, snapping a streak of three straight record highs.
The Dow was in the red all day after IBM reported lower revenues for the 13th consecutive quarter and United Technologies cut its earnings forecasts due to weak growth in China and weak aviation parts sales.
IBM fell 5.9 percent, while UTC dropped 7.0 percent.
Art Hogan, chief market strategist at Wunderlich Securities, said attention has shifted from last week’s bailout deal to keep debt-riddled Greece in the eurozone to “micro” issues surrounding earnings.
“And the micro is a mixed bag,” he said.
Dow member Verizon Communications fell 2.4 percent after reporting second-quarter net income of $4.4 billion, about 0.7 percent above that of the year-ago period. Revenues of $32.22 billion fell shy of the $32.45 billion projected by analysts.
Harley-Davidson advanced 5.0 percent as second-quarter earnings and revenues both topped analyst expectations. The company confirmed its 2015 targets, including a two to four percent rise in motorcycle deliveries compared with last year.
Tesla Motors fell 5.5 percent after UBS downgraded the stock, predicting car volume growth would disappoint and warning of higher costs and increased competition from other auto companies.
Qualcomm gained 2.1 percent following a Wall Street Journal report that said the company plans a strategic review that could lead to a breakup of the chipmaker.
Chesapeake Energy tumbled 9.5 percent after announcing that it will drop its dividend and steer the money into its drilling program.
Bond prices rose. The yield on the 10-year US Treasury fell to 2.34 percent from 2.38 percent Tuesday, while the 30-year dipped to 3.08 percent from 3.10 percent Monday. Bond prices and yields move inversely.
