S&P 500 nudges lower as industrials drag

Shares of 3M tumbled as much as 11 percent Thursday after results from the international manufacturing conglomerate fueled global economic growth concerns.

NEW YORK (REUTERS) - The S&P 500 closed just barely lower on Thursday (April 25), as a dive in industrial stocks and concerns about slowing global growth eclipsed gains in Facebook and Microsoft.

The industrials sector fell 1.99 per cent with hefty drags from 3M , United Parcel Service and Raytheon after they reported disappointing results. Fedex also slumped after UPS' profit miss.

Amazon.com shares were up 1.7 per cent after the market closed after the company reported a first-quarter profit that topped estimates, although its second-quarter revenue forecast was largely below expectations.

Intel Corp shares fell 7 per cent after the chip maker forecast current-quarter revenue below analysts' estimates.

But shares of Facebook and Microsoft both jumped, rising 5.8 per cent and 3.3 per cent, respectively, after they reported better-than-expected results.

"Sentiment is fluctuating as a result of mixed messages from earnings and data. We're going to continue to see fluctuations because we're likely to continue to see mixed messages," said Kristina Hooper, chief global market strategist at Invesco in New York.

She also cited high US jobless claims and an unexpected shrinking of the South Korean economy.

While expectations for aggregate S&P first-quarter earnings improved, investors kept a wary eye on future reports, said Lindsey Bell, investment strategist at CFRA Research in New York.

"Second-quarter estimates continue to be reduced. That's telling you there's a lot of caution. That's coming from corporate management teams as they provide guidance and the market is following their lead," Bell said.

"We're still in a wait-and-see mode regarding the direction of the economy so nobody's willing to go all out in the market right now especially with valuations at a premium."

The S&P 500 has rallied 17 per cent so far this year, rebounding from a late-2018 slump, on hopes of a US-China trade deal, the Federal Reserve's move to pause interest rate hikes and some better-than-expected earnings reports.

The index ended the day 0.5 per cent below its late September record high. It has struggled to break above that level as investors await more positive catalysts.

The Dow Jones Industrial Average fell 134.97 points, or 0.51 per cent, to 26,462.08, the S&P 500 lost 1.08 points, or 0.04 per cent, to 2,926.17, and the Nasdaq Composite added 16.67 points, or 0.21 per cent, to 8,118.68.

Refinitiv data through Thursday morning showed that Wall Street now expects S&P 500 first-quarter earnings to be level with the year-ago quarter, a sharp improvement from the 1.1 per cent decline expected just on Wednesday, and better than the 2 per cent fall expected at the start of April.

Excluding energy, the growth rate would climb to 1.4 per cent.

Gains in social media company Facebook lifted the communication services index 1 per cent, making it the second biggest gainer among the 11 major S&P sectors. Health-care stocks rose 1.1 per cent.

But 3M fell almost 13 per cent in its biggest one-day percentage drop in more than three decades, after it cut its 2019 earnings view and announced plans to lay off 2,000 workers. It was the biggest decline since Oct 19, 1987, when it dropped 20.3 per cent in a broad market crash.

Xilinx was the S&P's biggest percentage decliner, falling 17.1 per cent after the chipmaker's quarterly gross margins fell short of estimates. The Philadelphia chip index dropped 1.8 per cent.

Declining issues outnumbered advancing ones on the NYSE by a 1.80-to-1 ratio; on Nasdaq, a 1.47-to-1 ratio favoured decliners.

The S&P 500 posted 23 new 52-week highs and four new lows; the Nasdaq Composite recorded 56 new highs and 58 new lows.

On US exchanges 6.64 billion shares changed hands, in line with the 6.64 billion average for the last 20 sessions.