The Dow Jones Industrial Average fell lower on Tuesday as investors pulled back from record highs as a busy week of fourth-quarter earnings lay ahead. The 30-stock index lost nearly 100 points, while the S&P 500 Index and Nasdaq Composite added about 0.3% and 0.4%, respectively.
Here's how the market settled on Tuesday:
S&P 500 Index (SPY ): +0.29% or +14.17 points to 4,864.60
Dow Jones Industrial Average (DIA ): -0.25% or -96.36 points to 37,905.45
Nasdaq Composite Index (QQQ ): +0.43% or +65.66 points to 15,425.94
In the News: Wells Fargo market strategists warned on Tuesday that investors may be too optimistic about lower interest rates and positive corporate earnings lying ahead.
"We believe the market's disappointment upon realizing that its investment case is built on hope rather than reality will lead markets to pull back," the firm said in a client note Tuesday. "Our view is that earnings for all equity classes peaked and will move lower as the economy weakens and revenue growth stalls. In the near term, we expect pressure on earnings as well as prices with bouts of weakness and range trading."
On the Earnings Front: United Airlines (UAL ) shares rose on Tuesday following strong fourth-quarter results, but the carrier warned it expects a first-quarter loss stemming from the grounding of Boeing 737 Max 9 airplanes (BA ). "Despite unpredictable headwinds, we delivered on our ambitious EPS target that few thought possible - and set new operational records for our customers," said United CEO Scott Kirby in an earnings release.
Procter & Gamble (PG ) reported mixed earnings results for its fiscal second quarter on Tuesday and narrowed its full-year outlook for adjusted earnings per share to range between $6.37 to $6.43. Verizon (VZ ) reported better-than-expected fourth-quarter earnings on Tuesday, and forecasted for full-year earnings per share between $4.50 and $4.70, which is in range of expectations.
General Electric (GE ) shares came under pressure after the company issued weaker-than-expected first quarter guidance despite its strong fourth-quarter results. The company expects adjusted earnings between $0.65 to $0.65 per share for the first three months of 2024.
3M (MMM ) also issued disappointing full-year and first-quarter guidance following its recent quarter earnings report on Tuesday. The manufacturing giant expects full-year earnings per share between $9.35 and $9.75 and revenue growth in the range of 0.25% to 2.25%. For the first quarter, 3M forecasts for earnings per share of $2 to $2.15, below expectations for a profit of $2.22 per share.
Johnson & Johnson (JNJ ) reported better-than-expected fourth-quarter results on Tuesday, driven by strong sales from the company's pharmaceutical and medical devices businesses. The company also expects full-year sales of $87.8 billion to $88.6 billion and adjusted earnings of $10.55 to $10.75 per share.
In Single-Stock News: Coinbase (COIN ) shares came under pressure following a downgrade from JPMorgan to Underweight from Neutral, with the firm forecasting a more challenging year ahead for the cryptocurrency exchange platform.
"While we continue to see Coinbase as the dominant U.S. exchange in the crypto ecosystem and a leader in cryptocurrency trading and investing globally, we think the catalyst in Bitcoin ETFs that has pushed the ecosystem out of its winter will disappoint market participants," analyst Kenneth Worthington wrote in a late Monday note. "We value the stock on a normalized earnings power."
For Wednesday: market participants will react to earnings from Netflix (NFLX ), as well as the S&P's flash U.S. services and manufacturing PMI's for January.
