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US: Stocks fall on earnings disappointments
[NEW YORK] Wall Street stocks tumbled on Wednesday as investors punished companies whose earnings underperformed expectations and shifted into selling mode on the market as a whole.
US stocks have hit numerous records over the last month, leaving it vulnerable to a reversal, analysts said. Wednesday's declines were broad-based, with all 11 S&P 500 sectors in the red.
"Earnings season has been good overall, but we are still seeing some misses," said Gorilla Trades strategist Ken Berman. "Bulls know that a brief pullback might be necessary." Companies that experienced especially big dives included Advanced Micro Devices, down 13.5 per cent, Chipotle Mexican Grill, down 14.6 per cent and Edwards Lifesciences, down 9.5 per cent.
The Dow Jones Industrial Average dropped 0.5 per cent to 23,329.46, retreating from Tuesday's record.
The broad-based S&P 500 shed 0.5 per cent to 2,557.15, while the tech-rich Nasdaq Composite Index also declined 0.5 per cent to 6,563.89.
Dow member Boeing fell 2.9 per cent after reporting an 18.7 per cent drop in third-quarter earnings to US$1.9 billion - due in part to US$329 million in unexpected costs on the KC-46 military refueling tanker.
Fellow Dow member Visa rose 1.0 per cent after reporting that fourth-quarter net income rose 10.8 per cent to US$2.1 billion.
AT&T sank 4.0 per cent after reporting a nine percent fall in third-quarter net income to US$3.0 billion. Revenues of US$39.7 billion came in below analyst expectations.