The Dow Jones Industrial Average on Tuesday gave up gains and snapped a four-day winning streak, as consumer confidence posted a record drop and falling Big Tech pulled the market into negative territory.
Stocks earlier Tuesday had been up sharply following earnings from 3M (MMM) - Get Report, Caterpillar (CAT) - Get Report and Pfizer (PFE) - Get Report and after some states slowly began emerging from lockdowns.
But consumer confidence in the U.S. posted a record plunge, to 86.9 in April from 118.8 in March, a result of lockdowns and stay-at-home orders put in place during the coronavirus pandemic.
Big Tech led the Nasdaq lower - Alphabet (GOOGL) - Get Report, Facebook (FB) - Get Report and Amazon.com (AMZN) - Get Report declined. Each will be reporting earnings this week; Google parent Alphabet will report after the closing bell Tuesday.
The Dow finished down 32 points, or 0.13%, to 24,101, the S&P 500 was off 0.52% and the Nasdaq declined 1.4%. The Dow traded up as much as 1.6%, or 378 points, during the session.
West Texas Intermediate crude oil for June delivery settled down 3.4% to $12.34 a barrel on Tuesday. It had fallen almost 20% earlier following losses Monday of nearly 25% amid a worldwide oil glut and a lack of storage capacity.
3M on Tuesday posted stronger-than-expected first-quarter earnings, pulled its full-year profit guidance and cut its capital expenditure plans amid coronavirus uncertainty.
Pfizer (PFE) - Get Report posted stronger-than-expected first-quarter earnings and maintained its full-year profit guidance as key branded drugs drove solid gains for the drugmaker's biopharma division.
Merck (MRK) - Get Report posted first-quarter adjusted earnings that beat analysts’ forecasts as sales of its drugs and vaccines brought in more revenue than expected. The drug company lowered its full-year 2020 forecast as the ongoing coronavirus pandemic shifts demand for its products.
Caterpillar earned $1.98 a share in the first quarter, down from $3.25 a year earlier. The heavy equipment maker said it wouldn't be providing 2020 guidance because of the pandemic. It cautioned the coronavirus outbreak would continue to affect its operations for the rest of the year.
"Earnings season does not matter, other than to the extent companies can provide dividend reaffirmation, or provide some macro color," said David Bahnsen, chief investment officer of Bahnsen Group. "No surprises can come from current events creating negative impact - it is totally baked in.
"Stocks are trading off of health data improving, hope for monetary and fiscal stimulus to offset second- and third-quarter pain, and belief that fourth quarter and first quarter 2021 will show normalcy and a U-shape recovery," Bahnsen added.
Earnings reports are expected after the closing bell Tuesday from Alphabet (GOOGL) - Get Report, Advanced Micro Devices (AMD) - Get Report and Starbucks (SBUX) - Get Report, as well as Ford Motor. (F) - Get Report
The Trump administration released a "blueprint" Monday for states to expand their coronavirus testing.
Many political, business and health leaders, including President Donald Trump's advisers, have said expanded testing is necessary to enable people to safely go back to work and gather in public.
“We are continuing to rapidly expand our capacity,” Trump said Monday, adding he was “confident that we have enough testing to begin reopening and the reopening process.”
“We want to get our country open and the testing is not going to be a problem at all,” he said. “In fact, it’s going to be one of the great assets that we have.”