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US: Wall Street ends down; geopolitical risks weigh ahead of earnings
[NEW YORK] US stocks ended down but well off the day's lows on Tuesday, with concern over geopolitical risks weighing on sentiment as investors readied for the start of US corporate earnings reports.
Worries over rising tensions between the United States and Russia, Syria and North Korea drove investors into gold and other safe-haven assets and pushed up the CBOE Volatility index , Wall Street's fear gauge, which closed above 15 for the first time since Election Day.
US Secretary of State Rex Tillerson carried a message from world powers to Moscow on Tuesday denouncing Russian support for Syria's Bashar al-Assad.
Adding to the dour mood, North Korea state media warned of a nuclear attack on the United States if provoked as a US Navy strike group moved toward the western Pacific.
"Geopolitical risk is the focal point right now," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.
But, she said, "this is also a market trading at 18, 19 times forward earnings, the higher range. The earnings season is unfolding, and that's going to be important."
Stocks, which rallied sharply after the Nov 8 election on optimism President Donald Trump will boost the economy, have been drifting lower since the start of March. The S&P 500 traded below its 50-day moving average on Tuesday but managed to close above the key technical level.
Investors are banking on a strong corporate earnings season to help justify pricey valuations. Analysts expect earnings for all S&P 500 companies to have risen 10 per cent in the first quarter from a year ago, according to Thomson Reuters data.
Reporting begins this week with results from a handful of banks. The financial sector, down 0.3 per cent, was among the day's worst performers, while technology was the biggest drag, with the tech index down 0.4 per cent.
The Dow Jones Industrial Average ended down 6.72 points, or 0.03 per cent, to 20,651.3, the S&P 500 lost 3.38 points, or 0.14 per cent, to 2,353.78 and the Nasdaq Composite dropped 14.15 points, or 0.24 per cent, to 5,866.77.
Stocks cut their losses in the last part of the session.
Mr Trump, during a meeting with chief executives of US companies, said his administration was working to reduce regulations and revamp the Dodd-Frank Wall Street reform law, which he said may be eliminated and replaced with "something else".
Shares of United Continental fell 1.1 per cent after a worldwide backlash erupted against the airline over a passenger who was dragged off one of its US flights. Late in the trading session, its chief executive issued an apology.
Thursday will be the last trading day of the week on Wall Street ahead of the Good Friday holiday.
About 6.4 billion shares changed hands on US exchanges, compared with the 6.7 billion daily average for the past 20 trading days, according to Thomson Reuters data.
Advancing issues outnumbered declining ones on the NYSE by a 1.61-to-1 ratio; on Nasdaq, a 1.29-to-1 ratio favoured advancers.
The S&P 500 posted five new 52-week highs and one new low; the Nasdaq Composite recorded 59 new highs and 44 new lows.