US open: Stocks drop as investors sift through a raft of earnings releases
Wall Street trading started off with losses on Wednesday, despite initially recovering from the losses seen in pre-market trading, as investors braced for a raft of earnings releases that have, so far, struggled to lift markets in the face of rising interest rates and growing indications of a global economic slowdown.
As of 1540 BST, the Dow Jones Industrial Average was down 0.24% to 25,130.71, while the S&P 500 was 0.46% weaker at 2,728.08 and the Nasdaq was trading 0.75% lower at 7,380.69.
After recovering from what looked set to be a 500 point drop on Tuesday, at the opening bell the Dow lost just 50 points , knocking the index back under 25,150 but keeping it safely short of yesterday's intra-day low.
SpreadEx analyst Connor Campbell, said: "It appears that the Dow couldn't join in with the European rebound for the very reason its peers are in the green: the dollar. The US currency rose 0.5% against the pound and 0.6% against the euro, despite Donald Trump once again attacking Federal Reserve chief Jerome Powell.
"Or, perhaps it is up because of the President's pot-shots, investors taking it as a sign the central bank is on track for another Trump-displeasing hike in December. Brexit worries (sterling) and the ongoing Italian budget issues (euro) also played their part."
CMC Markets analyst Michael Hewson said: "Today's focus will again return to the latest numbers from Ford, Microsoft and Visa. Ford has been struggling for a while now, especially in Europe, so expectations probably aren't likely to be that high.
"On the tech front which has borne the brunt of the recent selloff, Microsoft's numbers will be in focus, in terms of how well its cloud business continues to do. The decision by CEO Satya Nadella to re-orientate Microsoft's business model towards the cloud has helped the Windows giant keep pace with the technological changes being created across the internet. Having turned over $110.36bn last year, this week's Q1 update should give a decent indication as to whether the company is on track to deliver the 12% revenue growth that investors are pricing-in for this fiscal year."
Hewson also said Visa's numbers were also likely to offer some insight into US consumer confidence and the willingness of consumers to use their credit cards to go out and spend.
Elsewhere on the corporate front, Northrop Grumman was down 0.68% in early trading despite posting a huge jump in third-quarter profit and lifting its earnings guidance for 2018.
Burger King parent Restaurant Brands was up just 0.16% after it reported a 49% increase in quarterly profit, while AT&T dropped 6.10% at the bell after the release of its third-quarter numbers.
Boston Scientific rose 0.64% after its quarterly profit beat expectations.
Elsewhere, UPS was down 3.46% after the parcel delivery company's third-quarter earnings per share came in in-line with market expectations and above the previous year's.
Boeing shares also took off, adding 3.07% after the company raised its full-year guidance.
On the data front, activity in America's manufacturing and services sectors picked-up noticeably in October, supporting the case for further policy tightening by the US central bank, economists said.
IHS Markit's composite output index for the US factory and services sector rose from a reading from a 53.9 last month to 54.8 in October, notching up a three-month high in the process.
Growth was quickest on the manufacturing side of the economy, where the corresponding Purchasing Managers' Index jumped from 55.6 to 55.9, its best level in five months.
IHS Markit's chief business economist Chris Williamson said: "The resilience of the domestic economy in the face of trade worries, and the strong price pressures indicated by the survey data, will add to expectations that the Fed will hike rates again before the end of the year."
Elsewhere, sales of new homes plunged 5.5% in the States during September, the fourth straight monthly drop.
The Commerce Department revealed that newly built homes sold at a seasonally adjusted annual rate of 553,000 last month. New-home sales were downwardly revised for August, wiping out its previously reported gain.
The annual rate of home sales has dropped 15.3% since May.