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April 20, 2021, 4:20 p.m. EDT

Dow ends lower for 2nd day as investors look past earnings beats

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By William Watts and Sunny Oh

U.S. stocks fell for a second session on Tuesday, as concerns about rising coronavirus cases globally offset healthy U.S. corporate earnings reports for the first quarter.

What did major indexes do?

  • The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.66% fell 256.33 points, or 0.8%, to finish at 33,821.30.

  • The S&P 500 /zigman2/quotes/210599714/realtime SPX +0.74% fell 28.32 points, or 0.7%, to close at 4,134.94.

  • The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.88% shed 128.50 points, or 0.9%, to end at 13,786.27.

  • The small-cap Russell 2000 /zigman2/quotes/210598147/delayed RUT +1.35% slid 1.9%.

On Monday, stocks suffered modest losses, with the Dow shedding 123.04 points, or 0.4%, while the S&P 500 fell 0.5% as both indexes pulled back from record finishes posted Friday. The Nasdaq Composite shed 1%.

What drove the market?

While most companies were beating estimates for first quarter earnings in the first week of the quarterly reporting season, stocks were taking a breather after ending at records last week.

Stocks likely to benefit from the economic recovery and the resumption of travel were hit, with United Airlines /zigman2/quotes/205037281/composite UAL +3.17% and American Airlines /zigman2/quotes/209207041/composite AAL +2.37% both down Tuesday. The U.S. State Department on Monday urged Americans reconsider any international travel they may have planned and said it would issue specific warnings not to visit roughly 80% of the world’s countries due to risks from the coronavirus pandemic.

“Stocks are dropping again today with no clear catalysts. Markets are a little stretched at this point, so we may see stocks take a small step back here and there. That’s normal, and we’d expect any dip to be bought quickly,” said Callie Cox, senior investment strategist for Ally Invest.

Earnings reports, which are off to a strong start for the quarter, were under scrutiny as investors gauge the strength of the economic recovery from COVID-19 pandemic, analysts said. Guidance from companies on the outlook for the year ahead may be even more important in determining the market’s direction.

“Corporate outlooks may indicate whether the rally from last year’s low could continue,” said Charalambos Pissouros, senior market analyst at JFD Group, in a note.

Read: Why it may still be early days for the stock-market reflation trade

“In our view, with most major central banks suggesting that any spikes in inflation this year are likely to prove to be temporary, and staying committed to keeping their monetary policies extra loose, we believe that even if the earnings disappoint somewhat, there is a decent chance for equities to rebound again and continue trending north,” he said.

Check out: Oil prices went negative a year ago: Here’s what traders have learned since

However, a pickup in new COVID-19 cases globally is putting a damper on sentiment, analysts said. The World Health Organization warned that global coronavirus infections were edging toward their highest level in the pandemic.

/zigman2/quotes/210598065/realtime
US : Dow Jones Global
34,777.76
+229.23 +0.66%
Volume: 311.63M
May 7, 2021 5:15p
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/zigman2/quotes/210599714/realtime
US : S&P US
4,232.60
+30.98 +0.74%
Volume: 2.05B
May 7, 2021 5:15p
loading...
/zigman2/quotes/210598365/realtime
US : Nasdaq
13,752.24
+119.39 +0.88%
Volume: 3.97M
May 7, 2021 5:16p
loading...
/zigman2/quotes/210598147/delayed
US : US Composite
2,271.63
+30.21 +1.35%
Volume: 0.00
May 7, 2021 7:01p
loading...
/zigman2/quotes/205037281/composite
US : U.S.: Nasdaq
$ 54.73
+1.68 +3.17%
Volume: 11.82M
May 7, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$17.17 billion
Rev. per Employee
$206,384
loading...
/zigman2/quotes/209207041/composite
US : U.S.: Nasdaq
$ 22.00
+0.51 +2.37%
Volume: 32.02M
May 7, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$13.78 billion
Rev. per Employee
$168,812
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