US stocks closed lower on Tuesday, unwinding initial gains after mixed earnings were compounded by weaker consumer confidence data as well as raised fears of a rate hike after a Treasury note sale flopped.
The S&P 500 market bellwether ended down 0.4% at 2143 and led by TV audience rater Nielsen Holdings (NYSE:NLSN) down 16.9% to $45.65 after poor earnings.
The S&P Midcap 400 came off more sharply, down 0.8% to 1522 and led by Superior Energy Services (NYSE:SPN) down 19% to $15.03 after Monday announced a net loss from continuing operations for the third quarter of 2016 of $113.9mln, or $0.75 per share, on revenue of $326.2mln.
The S&P Smallcap 600 was off 1% at 732 and led by First Nbc Bank (NASDAQ:FNBC) down 18.1% to $5.45 – despite a ruling this week that it had overcome hurdles to remain listed on Nasdaq.
October consumer confidence fell sharply and muddied the water in relation to the Federal Reserve’s plans to hike rates after the US presidential election in November.
But markets still think that a December Fed hike will come, after poor demand for the latest interst rate-sensitive two-year Treasury note auction earlier this session. Read more
Also weighing all day was the vigil for Apple’s after-hours earnings result. Apple Inc (NASDAQ:AAPL), the largest-listed stock in the United States, shares closed up 0.5% at $118.25 but traded 2.3% lower at $115.55 after-hours.
The share price tumble came despite bullish numbers. Apple reported quarterly earnings that topped analysts' estimates and revenue that was in line with expectations on Tuesday, as it saw better-than-expected iPhone sales worth 45.5mln units.
However, the fly in the ointment was that Apple said its annual revenues declined for the first time since 2001, as the company reported that iPhone sales fell for the third quarter in a row. Apple’s iPhone sales dropped for the third straight quarter. The company said it sold 45.5mln iPhones in the fiscal fourth quarter, down 5% from the previous year.
Overall sales dropped by 7.7% in fiscal 2016, the first fall in 15 years and a sharp reversal from the 27.9% growth rate in 2015.
The iPhone maker reported earnings per share of $1.67 per share, just above the $1.66 expected by a Thomson Reuters consensus estimate. Revenues came in at $46.90bn, just shy of the $46.94bn expected.
Open
US stocks opened lower on Tuesday - defying futures pit predictions - after Nielsen and Under Armour shares plunged and broker Goldman Sachs cut its S&P 500 earnings outlook.
Meanwhile, the US Conference Board’s consumer confidence index fell more than forecast this month as Americans grew less optimistic on their employment prospects and current economic conditions and upsetting Federal Reserve rate hike plans in its wake.
The S&P 500 index has yet to come up for air and was last seen down 0.05% at 2150.
Nielsen Holdings (NYSE:NLSN) shares slumped as much as 16% on Tuesday after the media-ratings firm found itself the focus of attention when it said profit slipped in its latest quarter in part because of the near doubling of restructuring charges.
The company, which has struggled to remain relevant as new forms of consumer viewing emerged, missed Wall Street expectations for earnings and revenue for the quarter ended Sept. 30. Read more.
Nielsen topped the losers board and was last down 14.9% at $46.76.
Meanwhile, Under Armour (NYSE:UA.C, NYSE:UA) may have felt it needed a full armed escort as its shares fell out of fashion on Tuesday after the athletic wear maker unveiled disappointing sales outlook and said its margins slid last quarter.
The second and third-biggest S&P500 faller its C shares were down 13.9% to $28.34.
Meanwhile, the top trio of gainers were Baker Hughes (NYSE:BHI), Lockheed Martin (NYSE:LMT) and Freeport-McMoRan (NYSELFCX) up 5.4%, 5.1% and 4.7% respectively.
It was reported on Tuesday that Goldman Sachs on Monday lowered its outlook on S&P 500 earnings for 2016 and 2017, largely putting the blame on some of the biggest players in Silicon Valley and on Wall Street.
“Financials and information technology, the two largest S&P 500 sectors based on earnings per share contribution, have both registered disappointing operating [earnings-per-share] growth in 2016 year to date,” David Kostin, chief U.S. strategist at Goldman Sachs, said in a note.
The S&P Midcap 400 was up 0.6% at 1525 and led by Superior Energy Services (NYSE:SPN) down 12.2% at $16.28 after the company announced a net loss from continuing operations for the third quarter of 2016 of $113.9mln, or $0.75 per share, on revenue of $326.2mln.
The biggest hit was taken by the S&P Smallcap 600, down 0.9% to 733 and led by First Nbc Bank (NASDAQ:FNBC) down 16.8% to $5.53. A recent regular top decliner in the ticker it would seem as though habits die hard. The bank confirmed that a long-hanging issue over its Nasdaq listing had been resolved, but the stock succumbed to profit-taking a day on.
In a statement First NBC Bank announced that it was notified by Nasdaq by letter dated October 24, that it had regained compliance with all applicable Nasdaq listing standards following the filing with the Securities and Exchange Commission of its Quarterly Report on Form 10-Q for the period ended June 30, 2016. As a result, the Nasdaq Hearings Panel has cancelled its previously scheduled hearing, and First NBC's stock will continue to be listed and trade on the Nasdaq Global Select Market.
The Consumer Confidence Index slid to 98.6 this month, from 103.5 in September. Wall Street economists had expected a reading of 101.5.
“It won’t be music to the ears of Fed Chair Janet Yellen that the US consumer appears to be less confident about the future of the economy,” said Dennis de Jong, managing director of UFX.com.
“Yellen is eyeing up another intervention on rates and would have wanted positive economic news ahead of the crunch decision, widely assumed to be taken in December,” he added.
Pre-Open
US stocks are indicated opening firmer on Tuesday after a plethora of “biggies” earnings reports included the return to profitability of the world’s largest-listed copper miner Freeport-McMoRan (NYSE:FCX).
But markets will be wary of getting too far ahead of themselves with Apple (NASDAQ:AAPL) - the biggest publicly traded company in the U.S. - among stocks set to release earnings after the close.
The S&P 500 market bellwether was expected to open around 0.1% higher.
Freeport-McMoRan suggested it could deal with its debt burden from growing cash flows and did not reveal further asset sale plans as it reported a return to quarterly profit.
Freeport shares were 1.5% higher at $10.36 pre-market.
Lockheed Martin Corp (NYSE:LMT.WD), the world’s biggest defence contractor by sales, beat earnings expectations and adjusted its full-year forecast after it shed its information technology division in August.
Shares were up 1.9% to $236.49.
General Motors (NYSE:GM) doubled net income in the third quarter amid strong truck sales in the US but warned that it is considering capacity cuts in Europe as the result of the Brexit vote and its effect on the pound.
However, GM shares were down 0.6% at $32.80.
Procter & Gamble Co (NYSE:PG) beat earnings estimates for its fiscal first quarter, as the world’s largest consumer goods company continues its battle to raise top-line growth after years of cost cutting.
P&G shares were soaring 3.3% higher to $86.89.
Meanwhile, United Technologies (NYSE:UTX), the maker of aerospace and building systems, reported better than expected results in the third quarter and lifted the lower end of its full-year earnings outlook helped by improving sales in its aerospace division.
The Connecticut-based company raised the lower end of its earnings outlook by 10 cents and now expects to earn between $6.55 and $6.60 a share, compared with analysts’ estimates for $6.57.
Shares were up 2.4% to $101.90.
Baker Hughes (NYSE:BHI), one of the world’s largest oilfield services groups, has become the latest company in the industry to predict an upturn in the North American industry, but also warned of a continuing decline in activity in the rest of the world.
Baker shares were leaping 5.5% higher to $55.00.
Meanwhile, the US oil benchmark West Texas Intermediate was down 0.2% to $50.43.
In data, the US Conference Board is releasing its October consumer confidence report at 1000 EDT (1400 GMT)