Stocks fell lower on Tuesday, off fresh record highs, as market participants navigated a slew of corporate earnings reports. The Dow Jones Industrial Average dropped over 300 points, while the S&P 500 Index and Nasdaq Composite lost about 0.8% and 1%, respectively.
Here's how the market settled on Tuesday:
S&P 500 Index (SPY ): -0.76% or -44.59 points to 5,815.26
Dow Jones Industrial Average (DIA ): -0.75% or -324.60 points to 42,740.62
Nasdaq Composite Index (QQQ ): -1.01% or -187.10 points to 18,315.59
Moving Markets:
ASML Holding (ASML ) shares dropped on Tuesday after the semiconductor equipment maker reported its earnings earlier-than-expected (its results topped estimates) and posted a weak forward guidance for its full-year 2025. The company now expects net sales between 30 billion and 35 billion.
"While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover," CEO Christophe Fouquet said in a statement. "It now appears that recovery is more gradual than previously expected."
Other chipmakers including Nvidia (NVDA ), Advanced Micro Devices (AMD ) and Broadcom (AVGO ) were all lower throughout the session.
On the Earnings Front:
Bank of America (BAC ) reported better-than-expected third-quarter earnings on Tuesday, as its investment banking fees surged to $1.40 billion, net interest income dipped 2.9% year-over-year to $14.1 billion, and its fixed income trading revenue rose 8% to $2.9 billion -- all above investor estimates.
Goldman Sachs (GS ) also topped estimates for its third-quarter on Tuesday, as its fixed income trading revenue fell 12% year-over-year to $2.96 billion and its investment banking revenue jumped 20% to $1.87 billion -- both above expectations.
UnitedHealth (UHG ) shares came under pressure on Tuesday after the insurance giant cut its top-end earnings guidance for its full-year despite its third-quarter earnings beat, with the cyberattack on its Change Healthcare division impacted its full-year. The company now sees 2024 earnings per share between $27.50 to $27.75, below its previous range of $27.50 and $28 per share.
Walgreens Boots Alliance (WBA ) shares rose Tuesday after the retail pharmacy chain reported strong fiscal fourth-quarter earnings and announced plans to close about 1,200 stores by 2027. CEO Tim Wentworth told analysts during the company's earnings call that the store closures will give the company a "healthier store base" and "will enable us to respond to shifts in consumer behaviour and buying preferences."
Walgreens expects adjusted earnings per share of $1.40 to $1.80 in fiscal 2025 on revenue between $147 billion to $151 billion -- both outlooks topping estimates.
Citigroup (C ) reported strong earnings on Tuesday, benefitting from growth in its investment banking and wealth management segments. Its earnings, however, were impacted by a higher cost of credit, including a net increase of $315 million in itis allowance for credit losses.
"This quarter, we closed another longstanding consent order which related to the effectiveness of our anti-month laundering systems," CEO Jane Fraser said during the company's earnings call with analysts. "We have increased our investments in areas where we have not made sufficient progress, such as data quality management. I and the management team remained steadfast and determined to get this transformation right and to get this done."
Johnson & Johnson (JNJ ) reported better-than-expected third-quarter earnings on Tuesday, and modified its forward outlook -- the pharmacy giant raised its full-year operational sales guidance to between $89.4 billion and $89.6 billion, but lowered its full-year adjusted earnings per share forecast to a range of $9.88 and $9.98.
In the News:
Etsy (ETSY ) shares declined on Tuesday after Goldman Sachs analyst Eric Sheridan downgraded the online marketplace due to a number of negative catalysts against the stock.
"While Street estimates (and our own modeling) seek to reflect more normalized growth levels in a better backdrop for discretionary consumer spending, visibility remains low on the timing of any such recovery," Sheridan wrote in a note to clients. "We monitor consumer survey data from HundredX, which currently does not suggest an imminent positive inflation in purchase intent."
McDonald's (MCD ) could see more upside in the near-term, according to Morgan Stanley analyst Brian Harbour, who maintained the fast-food giant's Overweight rating and raised his price target by $44 to $340 -- implying a more than 9% upside from Monday's close.
"The fundamental shift in 3Q doesn't seem that profound, but there is evidence things are moving in the right direction (not all of the industry seemed to see this), and sentiment/stock performance have clearly followed, with the U.S. at last maybe a source of upside in 2H," Harbour wrote in a note to clients. "Some sales catalysts are still to come, including perhaps a permanent value relaunch in 2025."
For Wednesday:
Investors will turn their attention towards earnings reports from companies including Abbott Laboratories (ABT ) and U.S. Bancorp (USB ) on Wednesday.