US stocks closed lower on Tuesday as the record high trend stalled on the back of wobbly corporate earnings and Netflix dragged the market lower.
The S&P 500 index ended down 0.14% at 2,163 – killing off more than a week of record highs - while the S&P Midcap 400 was down 0.2% at 1,542 and the S&P Smallcap 600 shed 0.6% to 736.
Among the biggest fallers was Netflix Inc (NASDAQ:NFLX), down 13.13% at $85.84 after reporting after hours on Monday that the subscribers outlook was not stellar.
Weaker oil prices did not help either. The West Texas Intermediate, the US oil barometer, was down 1.2% at $44.71.
Midsession
US stocks’ honeymoon record highs of the past week faded by midsession on Tuesday as the bellwether S&P 500 index, weighed down by a precarious earnings season, failed even momentarily to raise its head above the previous closing levels.
Monday of last week through Monday of this week, the S&P 500 managed to stage five record high closes in six days, coming close to matching its one week of gains seen in 1998.
The S&P 500 index was down 0.2% at 2,161.
Netflix (NASDAQ:NFLX) was Wall Street’s biggest decliner falling 13.6% to $85.32 after its after-hours results on Monday showed that subscriber growth had slowed and its outlook for new subscribers in the current quarter missed analysts’ expectations. At 47mln shares, it was also the second-biggest volume play on Wall Street after Bank of America Corp (NYSE:BAC).
The S&P Midcap 400 index was down 0.4% at 1,539 but there was no Guesswork who was the main decliner. The apparel group Guess Inc (NYSE:GES) was down 6.6% to $14.36 on no fresh news.
The S&P Smallcap 600 was down 0.6% at 736 with Super Micro Computer (NASDAQ:SMCI) leading the decline, with a 28% free-fall to $19.
The top declining sector on Wall Street was steel producers declining 10.5%, followed by silver miners down 9.34%.
Just like in London, where tech stocks fared well as investors asked who will be next to be snapped up after ARM Holdings (LON:ARM), tech stocks were the top performer, up 2.1%.
Open
What goes up must apparently come down, and so it was with US stocks at the outset.
Having ascended to new a high on Monday, the S&P 500 was around four points, or 0.2%, lower at 2,162 after 45 minutes of trading, weighed down by Netflix Inc (NASAQ:NFLX), which received bad reviews for its new subscriber numbers.
The mid-cap measure, the S&P 400, was faring similarly, down a couple of points at 1,543.
Wall Street is set for a steady start keeping momentum following Monday’s latest record close, and in early hours the attentions are on blue-chip earnings.
The Russell 2,000 index, which measure the performance of small caps, was even harder hit, shedding four points at 1,204.
On the Nasdaq exchange, the top riser was Golden Enterprises Inc (NASDAQ:GLDC), after it to a takeover by snack food company Utz Quality Foods.
Golden Enterprises shot up 58% to US$11.86, 14 cents shy of UTz’s 12 bucks a share offer for the owner of the Golden Flake snack food brand.
Also on the rise was Magnegas Corp (NASDAQ:MNGA), after it revealed successful sterilisation test results from the processing of septic water waste.
The shares surged 31% to US$0.74.
In contrast, Super Micro Computer Inc (NASDAQ:SMCI) dropped 28% to US$18.94 after the green networked computing company lowered earnings guidance.
Sector peer VMware Inc (NYSE:VMW) went the other way, hardening US9.2% to US$68.32 after its second quarter figures, released after the end of trading yesterday, topped expectations.
Market preview
After both indices closed at new highs Dow Jones and S&P 500 futures pointed only slightly lower.
Attentions are narrowing on a stream of blue-chip financials for the second quarter.
Goldman Sachs surpassed expectations with quarterly profits of US$3.72 per share and revenue also beat consensus forecasts.
Lloyd Blankfein, Goldman chief executive, said all businesses performed well despite Brexit uncertainties.
Johnson & Johnson was another blue-chip unveiling better than expected numbers, as the consumer products firm made a US$1.74 per share quarterly profit thanks in particular to strong sales in the United States.
Tobacco company Philip Morris International fell short of market forecasts, however, with a US$1.15 per share quarterly profit missing consensus by 5 cents.
IBM reported a US$2.95 per share quarterly profit, 6 cents better than consensus, driven by growth in cloud and mobile computing.
Yahoo! was something of a curate’s egg, with revenues ahead of the market whilst adjusted profits disappointed. Overall the attention remains on the pending sell-off of the group’s internet assets, with news anticipated in the coming days.
Netflix’s user growth is seemingly getting ‘chilled’ as it brought in 1.7mln new accounts, versus expectations for 2.5mln, following a hike in subscription fees.
Nevertheless, it still has a mass of 83mln users. It managed to meet revenue forecasts for the second quarter and beat market consensus for profit.