6 Min Read
NEW YORK (Reuters) - The S&P 500 snapped a four-day winning streak on Tuesday and pulled back from Monday's record closing high, while healthy earnings from United Technologies gave the Dow a slight lift.
Earnings, as a whole, though, were lukewarm and held back the broader market.
Technology shares weighed on the S&P 500 and the Nasdaq. Shares of Apple (AAPL.O) fell 1.7 percent to end at $418.99, ahead of the company's earnings after the closing bell.
Apple's stock added 3.6 percent in extended-hours trading on news that sales of the tech bellwether's iPhone blew past Wall Street's estimates in the third quarter, with U.S. shipments up 51 percent, even as profit fell. Initially, the stock was up 5 percent following the results.
Stephen Massocca, managing director of Wedbush Equity Management LLC in San Francisco, called the iPhone results "very, very good" and said he expects Apple's earnings to have a positive impact on stocks.
During the regular session, the S&P info tech index .SPLRCT slipped 0.5 percent to rank as the worst of the benchmark index's 10 industrial sectors. Six of the 10 S&P 500 industry sector indexes declined.
Stronger-than-expected earnings from United Technologies (UTX.N), the world's largest maker of elevators and air conditioners, drove the company's stock to an all-time intraday high of $105.63. The stock rose 3 percent to end at $105.12 and led the Dow industrials' advance after the company raised the low end of its 2013 earnings forecast.
Biotech shares also pulled down the S&P 500 and the Nasdaq. The S&P biotech subindex .SPLRCTKBI fell 2.3 percent a day after hitting an all-time high.
Stocks traded in a narrow range throughout the session. The benchmark S&P 500 moved just 7.65 points between a record intraday high of 1,698.78 and a session low of 1,691.13. The Dow's swing covered 60.16 points from its record intraday high of 15,604.22, reached within minutes after the opening bell, and its session low of 15,544.06.
"The market doesn't have justification to back off from the highs, but doesn't have enough of a catalyst to move it significantly one way or another," said Art Hogan, managing director of Lazard Capital Markets in New York.
"There's no one company reporting that tips over the cart."
The S&P 500's decline on Tuesday was only the second down day for the benchmark index in the last 14. The S&P 500 has gained 18.7 percent so far this year.
The Dow Jones Industrial Average .DJI rose 22.19 points, or 0.14 percent, to end at 15,567.74. The Standard & Poor's 500 Index .SPX fell 3.14 points, or 0.19 percent, to 1,692.39. The Nasdaq Composite Index .IXIC dropped 21.11 points, or 0.59 percent, to close at 3,579.27.
The Travelers Cos Inc (TRV.N) shares fell 3.8 percent to $82.21 after the company said it would cut jobs and reduce prices of auto insurance - steps investors viewed as an indication that rates had risen too far and competition was increasing. The company, a Dow component and the first major insurer to report results, is seen as a bellwether for the industry.
Of the 130 companies in the S&P 500 that have reported earnings so far this season, 63.8 percent have beaten analysts' expectations, but 51.5 percent have fallen short of revenue forecasts. Over the past four quarters, 67 percent of companies have beaten earnings estimates.
Netflix Inc (NFLX.O) shares dropped 4.5 percent to $250.26 a day after the movies and TV streaming service reported it had gained new subscribers in the second quarter. The number of new subscribers, though, was not enough to impress investors.
Elsewhere in the tech sector, Cisco Systems (CSCO.O) said it will buy software maker Sourcefire Inc FIRE.O for about $2.7 billion to increase its network security services. Sourcefire shares surged 27.8 percent to $75.49. In comparison, Cisco's stock fell 0.6 percent to $25.56.
Shares of Phillips 66 Partners (PSXP.N) surged 29.1 percent to close at $29.70 in their first day of trading. The initial public offering of 16.4 million shares was priced at $23 per share. The new publicly traded partnership has a contractual relationship with Phillips 66 (PSX.N), whose shares rose 2.6 percent to $59.49.
About 5.6 billion shares changed hands on U.S. exchanges, below the daily average of about 6.4 billion.
Advancers outnumbered decliners on the New York Stock Exchange by a ratio of 17 to 13. The opposite trend prevailed on the Nasdaq, with 13 stocks falling for nearly every 12 that rose.
Editing by Jan Paschal