Stocks Close Lower After Disappointing Quarterly Reports

The S&P 500 slipped 11 points, or 0.5%, to 2117, while the Nasdaq Composite shed 16 points, or 0.3%, to 5203. “Some days we’ll be up because of good earnings and some we’ll be down because of bad earnings”. China was supposed to pick up the slack, but that narrative is now being undercut by the reality of a Chinese economy growing more slowly and stock market volatility in the Middle Kingdom.

“The market is being cautious, waiting for a little more direction”, said Ian Kerrigan, global investment specialist at JP Morgan Private Bank.

On the other hand, Michael Antonelli, a managing director and institutional equity sales trader at Robert W. Baird & Co. noted that a “couple of fairly large names were weak and depressing” the sentiment today.

Earnings news is likely to remain in focus on Wednesday, with Apple (AAPL), Microsoft (MSFT), and Yahoo! The decline put the blue-chip index on track for its biggest percentage decline in about two weeks.

REVENUE MISS: IBM slumped 6.2 percent following a mixed earnings report late Tuesday.

IBM revenue fell for the 13th straight quarter, and that pushed investors to punish the stock. Apple slid 1 percent in regular trading.

MARKETS OVERSEAS: In Europe, Germany’s DAX was down 0.5 percent, while the CAC-40 in France fell 0.2 percent.

Chinese stocks rose for the fourth session in a row on Tuesday, with the Shanghai Composite Index up 0.6%.

Investors will also watch economic reports for clues on when the Federal Reserve will raise rates, with housing and jobless-claims data due later this week.

Global Business Machines Corp. dropped 5.2 percent in early New York trading after sales declined for a 13th quarter.

With traders reacting negatively to earnings news from some big-name companies, stocks have moved to the downside during trading on Tuesday.

United Technologies dropped the most since September 2011 after cutting its profit forecast amid weak demand, weighing on the S&P 500’s industrials group. Still, Toshiba shares ended up 6 percent, recovering recent losses, as investors took the resignations as a sign the company might use the opportunity to clean up its act. Xerox slumped 2.9 percent.

But 53 percent have topped revenue forecasts, below the 61 percent average beat rate since 2002. The Dow added 0.1% to 18100.41 and the S&P gained 0.1% to 2128.28. However, the retreat in commodities shares, along with the overwhelming downward pressure on energy and utilities sectors, all stemming from a cheaper crude, halted the rally in stocks.

Chesapeake Energy tumbled 9.5 per cent after announcing that it will drop its dividend and steer the money into its drilling programme.

Trucking companies rose, with the Dow Jones transportation average reaching a one-month high. C.H.

Net income in the quarter rose 0.7% to $4.35 billion or $1.04 per diluted share compared to $4.32 billion or $1.01 from the same quarter previous year.