U.S. stocks finished lower on Tuesday as third-quarter earnings remain in focus.
In the end, the Dow Jones Industrial Average lost 0.2%, the S&P 500 Index lost 0.4%, the Nasdaq Composite dropped 0.5% and the Russell 2000 finished 0.8% lower. Treasury bonds were mixed, the dollar was unable to hold early strength, gold gained 0.8% and the price of crude was lower down 1.1% on growing doubts about an OPEC-Russia supply freeze deal.
Crude was also hit by a surprise inventory build, with API stockpiles up 4.8 million barrels in the largest increase since April.
Defensive utility and consumer staples stocks led the way with gains of 0.5% and 0.3% respectively. Consumer discretionary and materials stocks were the laggards, down 1.2% and 1%, respectively.
Regional bank KeyCorp (NYSE:KEY) surged 6% thanks to a Q3 earnings-per-share beat on solid net interest income and loan growth. Procter & Gamble Co (NYSE:PG) gained on a Q3 earnings beat driven by 3% organic sales growth versus the 2.4% expected.
On the downside, Under Armour Inc (NYSE:UA) lost 13.2% despite better-than-expected earnings and revenues as gross margins disappointed and management comments that its growth rate going forward will slow. Whirlpool Corporation (NYSE:WHR) dropped 10.8% on a 5% earning miss on weak sales driven by soft demand.
After the close, Apple Inc. (NASDAQ:AAPL) lost 1.7% — in contrast to the torrid rally in the stock over the last three months for a 20% gain — after reporting tepid results. Revenues dropped 9% from last year to $46.9 billion with 45.5 million iPhones sold (down 5% from last year but slightly ahead of expectations). Earnings of $9 billion was a whopping 19% decline from last year. China sales were down 30% from last year.
The results will further fuel worries that the smartphone market is now mature and saturated, that the iPhone 7 is getting a lukewarm response, and that the company is facing serious headwinds in China.
Going forward, keep eye on crude oil as it looks ready for a fresh bout of weakness here as West Texas Intermediate drops back below the $50-a-barrel threshold and threatens a decline below its 20-day moving average for the first time since late September.
The November U.S. Oil Fund LP ETF (NYSEARCA:USO) puts recommended today to Edge Pro subscribers are already up 20%.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.
