Stocks fall as the busiest week of earnings season kicks off

Stocks traded lower on Monday as Wall Street braced for the busiest week of the earnings season.

The Dow Jones Industrial Average fell 58 points, while declines in the materials and real estate sectors pushed the S&P 500 down by 0.1%. The Nasdaq Composite also slipped 0.1%.

Boeing contributed the most to the Dow’s losses, falling 0.7% after The New York Times reported that workers at the company’s 787 jet plant have complained about shoddy production and bad safety practices.

More than 140 S&P 500 companies are scheduled to release their quarterly results this week, including Coca Cola, Procter & Gamble, United Technologies, Verizon, Twitter, Lockheed Martin and eBay. Facebook, Microsoft and Tesla Motors are also set to report later this week.

Halliburton and Kimberly-Clark are among the companies that reported better-than-expected quarterly results on Monday morning. Their shares rose 1.6% and 5.3%, respectively.

So far, the majority of corporate earnings reports have topped expectations. FactSet data shows 76.5% of the S&P 500 companies that have posted earnings have surpassed analyst estimates. Analysts came into the season with low expectations for the season, forecasting a 4.2% drop in profits.

“First-quarter earnings are coming in slightly better, so it’s removed some of the concern from the market,” said Robert Pavlik, chief investment strategist at SlateStone Wealth. “But not enough to move investors out of the sidelines.”

“I think that’s one of the reasons the market is consolidating,” he said.

The broader market also fell after the South China Morning Post reported China’s policy-making committee will pursue structural changes to its economy, rather than add stimulus. Chinese stocks closed sharply lower overnight, with the Shanghai Composite losing 1.7% while the Shenzhen A Shares index declined 1.5%.

Wall Street also focused on the oil market as U.S. crude rose 2.2% after the Trump administration said it will not allow the purchase of Iranian oil by some countries. The move could take about 1 million barrels per day out of the oil market. Energy shares rose along with oil prices. The Energy Select Sector SPDR Fund (XLE) traded 1.3% higher, led by Marathon Oil and Diamondback Energy.

On the data front, existing home sales for March fell 4.9% to a seasonally adjusted annual rate of 5.21 million. The drop last month came after an 11.2% surge in February.

CNBC

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Ed Moya

Ed Moya

Senior Market Analyst - The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya