The S&P 500 and Dow were subdued on Tuesday as Sino-U.S. tensions escalated following President Donald Trump’s moves to force a sale of TikTok’s U.S. operations, with investors also disappointed by quarterly results from Ralph Lauren and AIG.
Ralph Lauren Corp slumped 6.8% to its lowest since mid-May after quarterly revenue plunged by nearly $1 billion due to coronavirus-led store closures and a slowdown in global demand for luxury goods.
American International Group Inc also led declines on the S&P 500 with a 5.2% drop as its quarterly adjusted profit slumped.
Still, about seven of the 11 major S&P 500 sectors were trading higher, with utilities, energy and real estate leading gains. A 1.4% rise in Amazon.com Inc boosted both the S&P consumer discretionary index and the tech-heavy Nasdaq.
“The markets have been relatively narrow and benchmarks have been fortunate that they had so much weightage in the big tech companies,” said Stephen Lee, portfolio manager at Logan Capital Management in Newtown Square, Pennsylvania.
“Now we just have to see how we do outside of the technology-focused companies.”
A stimulus-led rebound and a rally in tech-related stocks including Apple Inc, Netflix Inc and Amazon has brought the S&P 500 to within 3% of its all-time high, and all eyes now are on a fifth major coronavirus-aid bill with Congress set to resume talks on Tuesday.
Meanwhile, with Microsoft Corp looking to buy short-video app TikTok’s U.S. operations, Trump said on Monday the U.S. government should get a “substantial portion” of any deal price.
On Tuesday, state-backed newspaper China Daily said the country will not accept the “theft” of the technology company.
Microsoft’s shares fell 1.4% in early trading.
At 10:06 a.m. ET, the Dow Jones Industrial Average was down 19.32 points, or 0.07%, at 26,645.08, while the S&P 500 was up just 0.28 points, or 0.01%, at 3,294.89.
The Nasdaq Composite was up 25.81 points, or 0.24%, at 10,928.61.
Take-Two Interactive Software Inc rose 3.5% as it raised its annual adjusted sales forecast on demand for its videogame franchises “Grand Theft Auto” and “NBA 2K”.
Rival Activision Blizzard Inc inched lower ahead of its results due after the closing bell.
Spirit AeroSystems dropped 5.3% on posting a bigger-than-expected quarterly loss.
About 83% of the 322 companies in the S&P 500 that have reported quarterly results so far have beaten estimates for earnings, according to IBES Refinitiv data.
Walt Disney Co, Fox Corp and Wynn Resorts Ltd are also expected to report quarterly results later in the day.
Advancing issues nearly matched decliners both on the NYSE and the Nasdaq.
The S&P index recorded 11 new 52-week highs and no new low, while the Nasdaq recorded 76 new highs and four new lows.
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