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Market Snapshot: Dow edges lower ahead of tech earnings flood

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Major U.S. stock benchmarks gave up modest early gains to trade flat to slightly lower Tuesday, a day after the S&P 500 index and Nasdaq Composite closed at records, as investors sifted through a torrent of corporate earnings reports and prepared for results from technology heavyweights.

What are major benchmarks doing?
  • The Dow Jones Industrial Average
    DJIA,
    -0.10%

    were off 11.27 points, or less than 0.1%, at 33,970.30.
  • The S&P 500
    SPX,
    -0.11%

    was off 4.14 points, or 0.1%, at 4,183.48.
  • The Nasdaq Composite
    COMP,
    -0.29%

    declined 52.51 points, or 0.4%, to 14,086.26.

On Monday, stocks ended mostly higher, with tech-related shares leading the move to the upside. The S&P 500 rose 0.2% and eclipsed its previous closing high from April 16 and the Nasdaq Composite jumped 0.9% to take it out its record finish from Feb. 12. The Dow stumbled, falling 0.2%.

What’s driving the market?

Corporate results for the first quarter were in the spotlight as one of the busiest weeks of the earnings reporting season got under way, with electric car maker Tesla Inc.
TSLA,
-3.58%

delivering its report late Monday afternoon. Tech results will be in the spotlight, with earnings for Microsoft Corp.
MSFT,
-0.35%

and Google parent Alphabet Inc.
GOOG,
-0.83%

GOOGL,
-0.90%

due after the closing bell Tuesday.

With about a third of S&P 500 index companies reporting so far, about 80% have beaten forecasts, according to FactSet.

“The biggest threat to the positive trend in technology stocks is the reflation trade, which would boost demand for cyclical stocks and move capital from the tech stocks towards the value names,” said Ipek Ozkardeskaya, senior analyst at Swissquote.

“But it looks like that migration from growth to value is happening without too much harm for the tech stocks for now, and some digital services, including the cloud business will unlikely be affected by the reflation theme as the end of the pandemic won’t reverse the migration of our data storage to the clouds,” she said, in a note.

Need to Know: Don’t bail on stocks now, says world’s top fund manager

The Federal Reserve on Tuesday will kick off a two-day policy meeting at which Fed Chairman Jerome Powell is expected to maintain his stance that interest rates won’t begin to rise until inflation exceeds the Fed’s 2% target.

Read: Why the Fed’s focus on those hardest-hit by the pandemic matters for markets

In U.S economic data, the Case-Shiller 20-city home price index jumped 11.9% in February from a year ago, the biggest increase in 15 years.

The Conference Board said its index of consumer confidence climbed to a 14-month high of 121.7 in April from a revised 109 in March.

Which companies are in focus?
What are other markets doing?
  • The yield on the 10-year Treasury note
    BX:TMUBMUSD10Y
    rose 1.6 basis points to 1.585%. Yields and bond prices move in opposite directions.
  • The ICE U.S. Dollar Index
    DXY,
    +0.09%
    ,
    a measure of the currency against a basket of six major rivals, edged up 0.1%.
  • Oil futures remained higher as reports said OPEC+ would cancel a Wednesday meeting and stick with a timetable to ease production curbs, with the U.S. benchmark
    CL00,
    +0.74%

    up 0.7% at $62.37 a barrel. Gold futures
    GC00,
    -0.02%

    were flat trading at $1,780.10 an ounce.
  • In global equity trading, the Stoxx 600 Europe index
    SXXP,
    -0.18%

    fell 0.3% and London’s FTSE 100 index
    UKX,
    -0.35%

    was off 0.2%. The Shanghai Composite
    SHCOMP,
    +0.04%

    ended fractionally higher, while Hong Kong’s Hang Seng Index
    HSI,
    -0.04%

    fell slightly and Japan’s Nikkei 225
    NIK,
    -0.46%

    fell 0.5%.

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