While first-quarter corporate profits are expected to have notched their best growth in seven years, largely due to lower taxes, investors have focused on cost warnings from companies.
“I think a lot of data is pointing to 2018 being a peak from many points of view,” said Mona Mahajan, U.S. investment strategist at Allianz Global Investors in New York.
“What’s concerning is beyond this year, the momentum will slow. We’re starting to see and what the market is starting to realize is a combination of perhaps the peak in momentum from earnings and economic perspective, combined with late-cycle rate-rising environment.”
At 12:43 p.m. ET, the Dow Jones Industrial Average was down 266.30 points, or 1.10 percent, at 23,896.85, the S&P 500 was down 14.11 points, or 0.53 percent, at 2,633.94 and the Nasdaq Composite was down 4.18 points, or 0.06 percent, at 7,062.08
Archer Daniels Midland, one of the largest exporters of U.S. sorghum to China, said it would take a $30 million hit to its trading profit in the second quarter due to the U.S.-China trade dispute.
Nine of the 11 major S&P sectors were lower, with a 1.3 percent drop in the industrial sector the biggest.
The energy sector fell 1.2 percent on the back of a more than 1 percent drop in crude oil prices as the dollar remained near a four-month high ahead of the Federal Reserve meet. [O/R]
Pfizer fell 4.3 percent, the most on the Dow, after posting its biggest miss on quarterly revenue in a year, on disappointing sales of some blockbuster drugs.
The technology sector was the lone gainer, up 0.3 percent as Apple jumped 1.5 percent ahead of its quarterly report after the bell.
Declining issues outnumbered advancers for a 2.16-to-1 ratio on the NYSE and for a 1.67-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and 27 new lows, while the Nasdaq recorded 25 new highs and 66 new lows.
(Reporting by Sruthi Shankar and Savio D’Souza in Bengaluru; Editing by Shounak Dasgupta)
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