NEW YORK – U.S. stock indexes closed lower on Tuesday as investors grew more cautious ahead of a U.S. consumer price index report and a meeting between U.S. political leaders to discuss the debt ceiling.
Investors will look for clues on whether inflation is continuing to ease following the Labor Department’s consumer price index (CPI) report on Wednesday.
Talks over the U.S. debt ceiling are adding to caution in the market as traders were also waiting for an update on plans for the debt ceiling from a meeting between U.S. President Joe Biden, Republican House Speaker Kevin McCarthy and other congressional leaders at the White House.
Worries of a potential government default loom over Washington as early as June 1, if Congress does not act to resolve the deadlock.
https://business.inquirer.net/398762/us-may-default-june-1-without-debt-ceiling-hike-biden-calls-mccarthy-to-meet
“Overall, it’s a relatively mild day, but both the debt ceiling as well as the inflation are causing some anxiety,” said Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research.
The Dow Jones Industrial Average fell 56.88 points, or 0.17 percent, to 33,561.81, the S&P 500 lost 18.95 points, or 0.46 percent, to 4,119.17 and the Nasdaq Composite dropped 77.36 points, or 0.63 percent, to 12,179.55.
Volume on U.S. exchanges was 9.35 billion shares, compared with the 10.68 billion average for the full session over the last 20 trading days.
Disappointing forecasts from companies such as PayPal and Apple supplier Skyworks also weighed on the mood. They were down 12.73 percent and 5.15 percent, respectively.
Shares of PayPal Holdings dropped and pressured the benchmark S&P 500 after the company cut its margin forecast. The stock was also among the top drags on the Nasdaq.
Skyworks Solutions Inc shares slid after the company forecast current-quarter revenue and earnings below estimates.
“Companies have generally been beating earnings expectations, but earnings season is always choppy, and today we have some weaker results. That’s weighing a bit on the market,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
Pacwest Bancorp had another volatile day, leading losses in regional banks earlier in the session before closing up 2.35 percent.
“Any relief that we get in terms of regional banking stress is good, but it’s far too early to say that things are normalized just because a couple of very beaten down banks are having a good day,” said Steve Sosnik, chief strategist at Interactive Brokers said.
Shares of other Apple suppliers including Qualcomm, Broadcom, Qorvo and Corning ended lower. The Philadelphia SE Semiconductor Index closed down 1.87 percent.
Boeing Co rose 2.34 percent after budget carrier Ryanair Holdings Plc placed a multi-billion dollar order for Boeing jets.
Novavax surged 27.79 percent as the drugmaker planned a 25- percent cut to its global workforce.
Under Armour Inc fell 5.66 percent as the sports apparel maker forecast its annual sales and profit below street expectations.
Dialysis services provider DaVita Inc jumped 12.9 percent on a rise in its annual profit forecast as demand for procedures pick up in the U.S.
Declining issues outnumbered advancing ones on the NYSE by a 1.59-to-1 ratio; on Nasdaq, a 1.35-to-1 ratio favored decliners.
The S&P 500 posted 14 new 52-week highs and 14 new lows; the Nasdaq Composite recorded 77 new highs and 171 new lows.