Weak corporate reports undermine market sentiment

US stocks fall as reports disappoint

US stocks retreated on Tuesday after weaker than expected economic reports and earnings undermined investor confidence. The dollar ended little changed underpinned by Fed rate hike expectations. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, closed at 97.820 Tuesday.

The Dow Jones industrial average declined 0.3% to 18169.27 led by shares of Home Depot and 3M, down 3.2% and 2.9% respectively. The S&P 500 lost 0.4% settling at 2143.16 weighed by consumer-discretionary and materials stocks. The Nasdaq index dropped 0.5% to 5283.40. Corporate earnings have been better than expected with 75.3% percent of the 150 companies that have reported so far beating analyst expectations, above the long-term average of 63.5%. At the same time lowered annual outlooks by a number of companies have raised concerns about prolonged earnings decline after 4 quarterly declines in a row. Bigger than expected decline in consumer confidence in October also weighed on market sentiment: consumer confidence dropped to 98.6 from 103.5 in September as reported by the Conference Board. In other economic news US home prices rose in August 5.1% over year according to the S&P Case-Shiller 20-City index. Today at 13:00 CET Mortgage applications will be released by the Mortgage Bankers’ Associations in US. At 15:45 CET October preliminary Services and Composite PMIs will be released by Markit. The tentative outlook is positive. At 16:00 CET September New Home Sales will come out. The tentative outlook is negative.