King of the earnings season Apple (AAPL) - Get Report was set to report after the bell Tuesday, but before that Wall Street had more of its fair share of earnings reports to sift through. The mix of results coming out from all corners of the S&P 500 led stocks to close lower on Tuesday.
The S&P 500 was down 0.38%, the Dow Jones Industrial Average fell 0.29%, and the Nasdaq slid 0.5%.
Nearly one-third of S&P 500 companies have reported earnings so far this season. Of those that have reported 75% have beat earnings estimates, above the historical average of 64%, while 60% have beat sales forecasts. The third-quarter blended earnings growth estimate is 1.7%, according to Thomson Reuters, on track to snap the longest earnings recession in seven years.
"So far, it has been a decent earnings season in the U.S., with banks in particular doing well," said Fawad Razaqzada, technical analyst at FOREX.com. "But it will only take a few disappointing numbers from bellwethers like Apple to turn sentiment sour."
Caterpillar (CAT) - Get Report was a major drag on the Dow after forecasting little growth next year. The manufacturing equipment company said it expects full-year 2017 revenue "not significantly different" than its 2016 projections. The company anticipates 2016 revenue to come in at $39 billion, below consensus of $40.1 billion. Analysts had anticipated fiscal 2017 revenue to climb to $39.27 billion.
Under Armour (UA) - Get Report slumped 13.2% after warning of slowing growth in coming quarters. The company's "growth rate going forward will be less than expected," executives said in remarks on an earnings call Tuesday. The workout apparel retailer reported a 28% increase in third-quarter profit, while revenue rose 22%. Earnings-per-share of 29 cents came in higher than estimates of 25 cents.
Apple, the world's largest company and the biggest weight on the S&P 500, was set to report earnings after market close on Tuesday. The recent launch of the iPhone 7 and Samsung's recent troubles with its Galaxy Note 7 are expected to boost sales.
However, the company is still expected to report its third straight quarter of declining revenue for the iPhone. Recent checks on Apple Watch sales also suggest weakness. An IDC report showed Apple shipped 1.1 million Apple Watches over the third quarter, a massive 71% drop from the same period a year earlier.
Crude oil fell on Tuesday, as hopes over a production freeze agreement among Organization of the Petroleum Exporting Countries faded. Iraq, the second largest producer in the bloc, expressed reluctance over the weekend to join in on a deal. OPEC members are set to meet in Vienna at the end of November.
"Iraq is insisting on an exemption so that it can fund its war against the terrorist militia IS," Commerzbank analysts wrote in a note. "It seems somewhat unlikely that the other OPEC states will agree to this. After all, this would ultimately mean that Saudi Arabia and its allies in the Gulf Region would bear the brunt of the burden given that Libya, Nigeria and Iran already look set to be exempted from production cuts. This makes the kind of agreement on concerted production cuts that was announced with such fanfare at the meeting in Algiers seem a long way off."
West Texas Intermediate crude was down 1.1% to $49.96 a barrel on Tuesday afternoon.
In other earnings news, Visa (V) - Get Report reported a jump in quarterly profit thanks to an increase in credit card spending over its recent quarter. The company earned an adjusted 78 cents a share in its fourth quarter, 5 cents higher than analysts expected. Growth was partly attributed to its purchase of Visa Europe.
Procter & Gamble (PG) - Get Report moved 3.4% higher after topping earnings estimates in its fiscal first quarter. The consumer goods company earned an adjusted $1.03 a share, a nickel above forecasts. Sales of $16.52 billion exceeded estimates of $16.48 billion. Procter & Gamble maintained its full-year guidance of 2% sales growth.
DuPont (DD) - Get Report reported a better-than-expected quarter and boosted its full-year profit estimates. The company expects adjusted earnings of $3.25 a share, up from its previous guidance range of $3.15 to $3.20 a share. The chemicals company more than doubled its adjusted earnings in its September-ended quarter, posting profit of 34 cents a share. Analysts expected 21 cents a share.
Lockheed Martin (LMT) - Get Report was up 7.4%, after breezing past third-quarter estimates and forecasting full-year growth in the high single-digit range. The defense company earned an adjusted $3.61 a share over its recent quarter, up from $2.42 a share in the same period a year earlier and above analysts' estimates of $2.89. Lockheed martin anticipates a 7% increase in fiscal 2017 sales.
United Technologies increased 1.9% after upping its full-year profit and revenue estimates. The aerospace company expects full-year organic sales to climb between 2% and 3%, compared to a wider range of 1% to 3% previously given. United now expects full-year earnings of at least $6.55 a share, up from a previous low-end range of $6.45.
Consumer confidence in the U.S. moved lower in October, though remained at a level indicative of healthy spending. The Conference Board's index fell to 98.6 in October, below an estimated 101 reading and down from 103.5 in September. Confidence in current conditions and expectations both mellowed. Analysts expect the end of the election season to boost sentiment in coming months.
Home prices in the U.S. rose at a healthy clip in August as constrained supply and high demand pushed valuations higher. The S&P CoreLogic Case-Shiller 20-City Index rose 0.4% in August and 5.1% compared to a year earlier. Analysts had anticipated a 0.2% monthly gain. The measure is just 10 basis points from its 2006 peak.