Stocks were lower by mid-afternoon Tuesday, pulled down by weakness in the tech and health care sectors.
The S&P 500 was down 0.19%, and the Dow Jones Industrial Average declined 0.05%. The Nasdaq fell 0.58%.
Tesla (TSLA - Get Report) added to the Nasdaq's losses in the afternoon session after its Consumer Reports rating fell. The Tesla Model S is now rated as "worse than average" due to a number of complaints from owners, including sunroof leaks and faulty charging equipment. Shares slumped more than 9%.
IBM (IBM - Get Report) shares fell 5.6% after the company reported a sharp decline in quarterly sales and reduced its full-year profit guidance. The tech giant reported a 14% drop in sales in its third quarter, missing analysts' estimates. IBM said it expects full-year net income of $14.75 to $15.75 a share, down from previous guidance of $15.75 to $16.50.
Major tech giants such as Amazon (AMZN - Get Report) , Alphabet (GOOGL - Get Report) , Alibaba (BABA - Get Report) and Netflix (NFLX - Get Report) sold off in sympathy. The Technology SPDR ETF (XLK - Get Report) fell 0.5%.
The health care sector was the worst performer on markets. Biotech stocks, in particular, were sharply lower including Valeant Pharmaceuticals (VRX) , Gilead Sciences (GILD - Get Report) , Biogen (BIIB - Get Report) , and Pfizer (PFE - Get Report) . The iShares NASDAQ Biotechnology Index ETF (IBB - Get Report) fell 3%.
Biotech losses escalated throughout the session, a hangover from extreme volatility over the past several weeks. Biotech stocks have been on alert after Democratic presidential candidate Hillary Clinton vowed to address "price gouging" in the industry in September.
Verizon (VZ - Get Report) climbed more than 1% after beating earnings and sales estimates in its third quarter. The telecom giant earned $1.04 a share, 2 cents above estimates, while revenue jumped 5% to $33.16 billion. Increased revenue was driven by growth in Fios and Verizon's wireless business.
Other companies reporting on Tuesday included Travelers (TRV - Get Report) which released a better-than-expected third-quarter report. Net income of $2.97 a share beat estimates by 70 cents, while revenue jumped 2.7% to $6.19 billion.
Harley-Davidson (HOG - Get Report) fell more than 15% after a disappointing quarter and reduced full-year forecasts. The motorcycle manufacturer expects to ship 265,000 to 270,000 units for the full year, down from at least 276,000, as it faces an increasingly competitive environment. Third-quarter net income of 69 cents a share was flat from a year earlier and missed estimates by 9 cents. Harley-Davidson said it would cut jobs as a result of weakened demand, though declined to detail the extent of layoffs.
Sonic Restaurants (SONC) added nearly 5% after same-store sales in its fourth quarter increased 7.3%, a significant increase in growth from a 6.1% increase last quarter. Quarterly profit of 43 cents a share beat estimates by a penny.
United Technologies (UTX - Get Report) added 2% after announcing a $12 billion share buyback program and a better-than-expected third quarter. Net income of $1.67 a share bested estimates of $1.55. However, revenue came in short estimates as currency exchange ate into the topline and amid engine-delivery delays over the quarter.
United Airlines (UAL - Get Report) named Brett Hart, general counsel, as its acting CEO while CEO Oscar Munoz recovers from a heart attack. Munoz was hospitalized late last week and his expected recovery time has not been disclosed.
In deals news, SanDisk (SNDK) jumped more than 7% on reports it is in advanced talks to sell itself to Western Digital (WDC - Get Report) . A deal could be announced as soon as this week, according to Bloomberg. Previous reports noted that SanDisk had been in deal talks with both Western Digital and Micron Technology.
Team Health Holdings (TMH) jumped 20% after receiving, and rejecting, a $5 billion bid from AmSurg (AMSG) . The cash-and-stock offer valued the healthcare provider at $71.47 a share, a significant premium to Monday's close of $52.50 a share.
Yum! Brands (YUM - Get Report) jumped 5% after it said Tuesday it would separate its Chinese and U.S. businesses after several quarters of declining sales overseas. Chinese revenue has taken a big hit after a food scandal mired KFC's suppliers last year. Activist investor and board member Keith Meister believes a spin-off could be worth $7 billion, Bloomberg reports.
Fresh Market (TFM) climbed 4% after trading resumed following a brief halt. Trading had been paused as the company announced it was conducting a strategic review of its business, including a potential sale. The grocery chain has hired JPMorgan as its financial adviser.
Weight Watchers (WTW) extended gains on Tuesday after rocketing more than 100% higher a day earlier. Shares had doubled their value after Oprah Winfrey took a 10% stake in the company. Winfrey made more than $70 million over Monday's session on the new position.
General Electric (GE - Get Report) shares were on watch after it began its offer to exchange shares of GE for Synchrony Financial (SYF - Get Report) stock at a 7% discount. Synchrony will become a stand-alone savings and loan company following the exchange offer. But despite the enticing offer, some argue holding onto GE shares will benefit investors in the long run.
Housing starts were a bright spot on Tuesday. Construction on new homes in the U.S. climbed 6.5% to 1.21 million in September, returning to June's level at an eight-year high. Economists had expected September starts to total 1.14 million.
"The September starts report suggests that the U.S. housing recovery might be regaining its footing, after the brief relapse during the summer months," Millan Mulraine, deputy chief U.S. macro strategist at TD Securities, wrote in a note. "Moreover, the strong performance in September should provide a modest lift to overall economic activity."