Wall Street opens lower as GE's weak earnings weigh on market sentiment

People walk by the Goldman Sach's New York headquarters in New York City on July 18, 2017.
People walk by the Goldman Sach's New York headquarters in New York City on July 18, 2017.PHOTO: AFP

WASHINGTON (REUTERS) - US stock indexes opened lower on Friday (July 21), as industrial heavyweight General Electric's tepid results weighed on investor sentiment.

Shares of GE fell as much as 5.4 per cent to their lowest level since Oct 2015, despite the results beating estimates, as the company reported a nearly 60 per cent slump in profit.

The stock was the biggest drag on the Dow and the S&P 500.

Honeywell International reversed course after market opened and fell 0.7 per cent despite the technology and manufacturing company reporting a rise in its second-quarter profit.

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Microsoft fell 0.5 per cent, despite the company reporting strong fourth-quarter earnings.

Attention will turn to earnings from big tech names next week, including Amazon, Alphabet and Facebook .

The Nasdaq notched its 10th straight record close on Thursday, marking its best streak since February 2015.

The tech sector has been the best performing S&P sector this year, despite concerns over stretched valuation, as investors look for growth in an otherwise low-growth environment and sectors that are relatively immune from a policy gridlock in Washington.

"If tech earnings were to disappoint, it might finally be the thing that causes a correction, even if it's a small one,"said J.J. Kinahan, chief market strategist at TD Ameritrade.

Still, overall earnings are expected to be good with analysts expecting earnings to have climbed 8.6 percent, above the 8-per cent rise projected at the start of the month, according to Thomson Reuters I/B/E/S. About 15 per cent of S&P 500 companies have posted results so far. "The earning season has been good so far and CEOs are also painting a good picture. A lot of people are booking profits and readjusting their positions. It's been a pretty good year so far and people are taking money off the table," said Kinahan.

At 9:37 a.m. ET (9:37 p.m. Singapore time), the Dow Jones Industrial Average was down 65.65 points, or 0.3 per cent, at 21,546.13, the S&P 500 was down 6.08 points, or 0.24 per cent, at 2,467.37. The Nasdaq Composite was down 14.92 points, or 0.23 per cent, at 6,375.08.

Nine of the 11 major S&P sectors were lower, with the industrials index's 0.81 percent fall leading the decliners.

Advancing issues outnumbered decliners on the NYSE by 1,281 to 1,213. On the Nasdaq, 1,184 issues fell and 1,119 advanced.