US close: Stocks close lower as earnings jitters kick in
US stocks closed lower on Tuesday as investors looked to the start of the first-quarter earnings season later in the week even as they mulled the latest developments in global trade relations.
At the close, the Dow Jones Industrial Average was down 0.72% at 26,150.58, while the S&P 500 traded 0.61% lower at 2,878.20 and the Nasdaq moved 0.56% weaker to 7,909.28.
The Dow Jones closed 190 points lower on Tuesday as late gains across many Asian indices failed to provide anything in the way of confidence.
Downgrades for several heavyweight US stocks yesterday, just ahead of earnings season, and some disappointing economic data of late also did very little to bolster sentiment amongst traders.
Trade relations were in focus again as it emerged that the US is considering imposing tariffs on about $11bn of goods from the European Union in response to subsidies that support Airbus.
Chris Beauchamp, chief market analyst at IG, said: "Hopes were high last week that trade tensions between the US and China were being resolved, but now the president appears keen to reopen the battle with Europe even before the one with China is resolved.
"Such a development is not likely to be positive for risk assets, especially after such a strong run and ahead of a vital season for earnings."
Meanwhile, the world's economic watchdog took an axe to its near-term forecasts for global growth for the third time in six months, warning that the outlook for a projected recovery in growth was "precarious".
In its 2019 World Economic Outlook, the International Monetary Fund slashed its prediction for the rate of growth in global GDP in 2019 by 0.4 percentage points to 3.3% and that for 2020 by 0.1 percentage points to 3.6%.
In corporate news, Wynn Resorts shares were down 3.86% at the close after it confirmed that it was in talks to buy Australia's Crown Resorts.
Boeing shares lost 1.51% to end the session lower amid the aeronautic outfit's continued grounding of its troubled 737 MAX fleet.
On the data front, the National Federation of Independent Business' small business optimism index nudged up to 101.8 in March from 101.7 the month before, but was still below consensus expectations of 102.0.
"Small business owners continue to create jobs, expand their operations, and are enjoying strong sales," said NFIB president and chief executive Juanita Duggan.
"Since Congress resolved the shutdown, uncertainty has declined as small business owners add jobs, increase sales, and invest in their businesses and employees."
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "This is disappointing; we expected clear rebounds in the key expectations components - for the economy and firms’ own sales - but both were unchanged, despite the rebound in stock prices and the upturn in most of the labour market components of the survey, which were released last week ahead of the employment report, as usual."
Elsewhere, labour demand in the States deteriorated quite sharply in February, possibly adding to evidence of a slowdown in hiring, the results of a closely-followed survey showed.
According to the Department of Labor, the number of job openings retreated by 538,000 to reach 7.1m (consensus: 7.566m), with the job openings rate declining to 4.5% - an 11-month low - although at 5.7m the number of hires did not see a big change from the month before.
The biggest decrease in openings was in the private sector, where they fell by 523,0000.
Together with the declining proportion of companies in the NFIB's monthly survey of small-sized firms, released earlier, the JOLTS survey "suggests that wage growth may not have much further to rise".