S&P 500 Index Slips Amid Health-Care Earnings, Apple Sales View

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  • Equities seesaw on swings in crude oil, energy producers
  • Lenders jump to 2016 high as yields on Treasuries climb

The S&P 500 Index edged lower, after lurching between gains and losses, with corporate reports spurring a tug of war as financial and industrial companies advanced to counter losses among health-care and technology shares.

A disappointing forecast from Apple Inc. weighed on tech, and Edwards Lifesciences Corp. plunged the most in three years to drag health-care lower after the company’s sales missed estimates. Countering declines, Boeing Co. jumped the most in 21 months following its quarterly report. Mondelez International Inc. rallied after boosting its profit forecast, and the KBW Bank Index rose to its best level this year as Treasury yields approached June highs.

The S&P 500 fell 0.2 percent to 2,139.43 at 4 p.m. in New York, after briefly erasing a 0.5 percent slide when crude oil wiped out losses on signs of lower supplies. The benchmark renewed declines as oil again lost momentum in the afternoon. The Dow Jones Industrial Average rose 30.06 points, or 0.2 percent, to 18,199.33, bolstered by Boeing. The Nasdaq Composite Index slumped 0.6 percent, the most in two weeks. About 6.7 billion shares traded hands on U.S. exchanges, 3 percent above the three-month average.

“It’s not common to see the Dow, the S&P and the Nasdaq performing in such disparate ways,” said Brian Jacobsen, chief portfolio strategist with Wells Fargo Funds Management LLC, which oversees $242 billion. “Only 4 percent of the time have we seen the Dow outperform the S&P and the S&P outperform the Nasdaq by these margins. It’s typically driven by just a handful of names or sectors sticking out like sore thumbs, so it’s important to not assume the Nasdaq is telling us something the Dow or the S&P are missing. Still, it’s rare and rare events tend to grab our attention.”

The S&P 500 hasn’t climbed for more than two consecutive days for almost five weeks, unable to gain traction during an earnings season dappled with disappointing forecasts from Intel Corp. to 3M Co. and Apple. While 78 percent of companies that have reported so far beat profit forecasts and 62 percent exceeded revenue estimates, analysts still predict third-quarter income will be flat compared to a year ago. Google parent Alphabet Inc. and Amazon.com Inc. are among those releasing results tomorrow.

Shares moving on earnings news included:

  • Chipotle Mexican Grill Inc. sank to a three-year low, with quarterly results missing estimates as the company struggles to come back from an outbreak of foodborne illnesses last year.
  • Southwest Airlines Co. dropped 8.5 percent after predicting a revenue measure may worsen this quarter, a sign of diminished power to raise airfares.
  • Biogen Inc. rallied 3.7 percent after its quarterly profit topped estimates, with sales from a top-selling multiple-sclerosis drug jumping 10 percent.
  • Northrop Grumman Corp. climbed to a record, after raising its full-year earnings forecast as third-quarter results topped estimates.
  • Akamai Technologies Inc. and Juniper Networks Inc. surged more than 10 percent after their profits beat estimates, offsetting some of Apple’s drag on the technology group.
  • Huntington Bancshares Inc. advanced 5 percent to a nine-month high after its quarterly results topped predictions. That helped sending lenders in the S&P 500 toward a ten-month high.

Meanwhile, investors are assessing the likely trajectory of interest rates and the outcome of the the U.S. presidential elections, with the next Federal Reserve meeting and the vote both due in the next two weeks. Traders see a less than one-in-five chance the Fed will raise rates at its next meeting before the election. They are pricing in nearly 73 percent odds of a December move.

A report today showed purchases of new-homes in September stayed close to an almost nine-year high, showing residential real estate was maintaining momentum heading into the quieter selling season.

“The market is pretty directionless at the moment, chopping around in a range,” said Michael Hewson, a market analyst at CMC Markets in London. “Some investors are trimming down their portfolios ahead of next week’s Fed announcement.”

The S&P 500 is on track for a third monthly decline and its worst since January. That goes against its historical trend -- the benchmark has climbed 1.9 percent on average in the past 25 Octobers, the biggest gain of any month. It’s trading at 18 times forecast earnings, the highest since 2009.

In Wednesday’s trading, seven of the S&P 500’s 11 main industries retreated, with real estate sinking 1.3 percent while technology and health-care shares lost at least 0.5 percent. Financials and industrials increased more than 0.4 percent. The CBOE Volatility Index rose 5.8 percent to a one-week high.

“The markets typically trade defensively in October before an election anyway, I expect more of the same,” said Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird. “The market is going to go lower before it goes higher. It’s going to require a springboard and that springboard requires slightly lower prices.”