4:12pm: Alphabet earnings on deck
US stocks finished Tuesday's session mixed as investors digested a slew of earnings reports.
The Nasdaq gained 0.8% at 18,712 points and the S&P 500 was up 0.2% at 5,832 points while the Dow Jones shed 0.4% at 42,233 points.
Attention after the closing bell will turn to tech earnings with reports from Google owner Alphabet, Advanced Micro Devices, and Snap.
3:25pm: Alphabet due up
Alphabet Inc (NASDAQ:GOOG), Google's parent company, is expected to report strong growth on top and bottom lines for the third quarter when it hands down its latest financial report after US markets close.
Wall Street analysts, on average, see earnings per share surging 18% year-over-year to $1.83 from $1.55.
Revenue is expected to grow almost 14% to $72.85 billion from $64 billion for Q3 2023.
Google Cloud revenue growth is seen at almost 30% to $10.91 billion, up from $8.41 billion in the year-ago quarter.
Advertising revenue will be scrutinized, amid competition concerns and legal challenges for Google. However, the company’s advertising revenue should have benefited from increased spending in the US in the leadup to the Presidential election in early November.
2:40pm: High valuations, low returns?
The S&P 500 has surged over 22% this year, with nearly 50 record highs, but the elevated price-to-earnings (P/E) ratio raises concerns about future returns, according to analysis by Jeff Buchbinder, Chief Equity Strategist for LPL Financial.
"Throughout the record-setting rally this year, even as corporate profits broadly backed lofty valuations, market watchers from Wall Street to Main Street have cited stretched valuations," Buchbinder noted. "But, as valuations get even more stretched following the latest rally, we ask, does today’s fun signal a dimmer decade ahead?"
According to Buchbinder, historical data since 1990 suggests that high starting valuations often lead to more modest 10-year forward returns. Currently, the S&P 500's P/E ratio of 21.8 is above the five-year average of 19.8.
Citing studies, including one from Goldman Sachs, Buchbinder suggests that future annualized returns may be closer to 3%, well below the historical average of 11% since 1950.
1:25pm: Rally stalls
Stocks were mixed amid weaker-than-expected US job openings and disappointing Q3 earnings, according to Axel Rudolph, Senior Technical Analyst at online trading platform IG.
"US stock indices were mixed on Tuesday but their European counterparts traded in negative territory as investors were reacting to recent data and earnings results," Rudolph commented.
"US job openings at their lowest level in over three years, house prices rising the least in ten months and the goods trade deficit rising to over two-year highs dampened investors spirits, as did corporate earnings."
Rudolph noted that McDonald's saw a larger-than-expected drop in global sales, driven by reduced customer demand. This decline occurred ahead of key earnings reports from major tech companies, including Alphabet later today, Meta and Microsoft tomorrow, and Amazon and Apple on Thursday.
11:55am: S&P makes comeback
The S&P staged a small comeback on Tuesday morning, poking its head 0.1% above the flatline just before noon.
It joined the Nasdaq in postive territory, with the tech-heavy index adding 0.5% to opening levels.
The Dow continued to struggle, falling around 0.2%.
11:05am: Ford to see better profits in 2025 - BofA
Bank of America analysts have reiterated backing for Ford, despite an earnings miss in the third quarter.
Ford had reported adjusted per-share earnings of $0.49 for the quarter on Monday, which Bank of America noted was below its forecast for $0.50.
Guidance was also trimmed in the results, with analysts highlighting a $400 million foreign exchange headwind.
This prompted the bank to lower its share price target for Ford from $20 to $19, though a ‘buy’ rating was reiterated.
“There is some time to go before all the new investments Ford is making materialize,” the bank said.
“However, with a strong near-term product cadence combined with management's focus, we expect better profits and progress in 2025.”
10.35am: Job openings at three-year low
Last month, US job openings fell to their lowest in more than three and a half years, keeping pressure on the Federal Reserve as it considers the pace of interest rate cuts.
There were 7.4 million job vacancies in September, down from a revised 7.9 million the month before, according to a Labour Department update.
It was the lowest JOLTS reading since early 2021, and below the expected 8 million openings.
The job openings figures are an entree ahead of the release of non-farm payrolls data on Friday.
10:00am: Small losses, most erased already
US stocks fell in early trading but are already erasing their losses.
The Dow Jones fell over 100 points and the S&P 500 by 20 points, both down around 0.1%.
Losers included carmaker Ford, down 9%, and homebuilder DR Horton, down 11%, both on the back of earnings that disappointed.
Stanley Black & Decker was down 11% after it posted quarterly sales that missed forecasts, though it tightened its profit outlook.
Among tech giants, Tesla Inc (NASDAQ:TSLA) was down 1.2%, with most other Magnificent Seven stocks little moved.
8.45am: Stocks heading lower, led by Dow and S&P
Wall Street stocks are expected to head lower on Tuesday, reversing gains made at the start of the week as more earnings flood in.
Futures are pointing to a 0.2% decline for the S&P 500 and 0.4% for the Dow Jones, with Nasdaq futures down less than 0.1%.
Overnight, the S&P 500 rose 0.3%, with 70% of its constituents higher on the day, with the Nasdaq also rising 0.3% and the Dow Jones climbing 0.65%.
McDonald's Corp shares were down 2.2% premarket after reporting a 1.5% drop in third-quarter global comparable sales, despite US sales rising 0.3%.
Pfizer Inc (NYSE:PFE, ETR:PFE) was up only 1% premarket even though earnings smashed expectations and the full-year outlook was lifted as the drug giant benefitted from sales of its Covid vaccine and antiviral pill Paxlovid.
Shares in Ford Motor Company were heading down 6.7% after earnings posted after the close yesterday, where the carmaker trimmed its full-year earnings outlook.
Ford's UK office staff are to go on strike tomorrow over a dispute about pay and contract changes, with unions saying the US company has failed to offer its workers a permanent pay increase.
A big riser overnight was Trump Media & Technology Group Corp, up 17% in premarket trading to their highest level since June, as investors showed confidence in Donald Trump’s election chances following his Madison Square Garden rally, with shares in conservative video platform Rumble also climbing nearly 15%.
Market analyst David Morrison at Trade Nation noted that yesterday’s gains came despite another pick-up in bond yields, with the yield on the 10-year Treasury note continuing to rise this morning, nosing above 4.30% for the first time since July.
"So far, investors have been relatively sanguine about the jump in yields since mid-September. But things could start to get clammy if the 10-year were to close in on 4.50% or thereabouts."
Any pressure on equities that yesterday’s uptick may have done was "cancelled out" by the big slump in oil prices, he said, with WTI down around 6%.
On that note, there were headlines on Tuesday that gasoline prices in US are headed below $3 a gallon for the first time since 2021.
Today’s key macroeconomic data reports include JOLTS job openings and the Conference Board's consumer confidence survey.