US stocks eyed their third consecutive daily drop as investors absorbed a mixed bag of earnings news.
Heavy losses for shares in Netflix weighed on the communication services sector, which led a 0.1 per cent retreat for the S&P 500 on Thursday and offset gains in financials and consumer staples. The benchmark index slid as much as 0.4 per cent in morning trade.
The Dow Jones Industrial Average and Nasdaq Composite were down 0.3 per cent and 0.4 per cent, respectively.
Netflix, the first of the major technology stocks known as the Faangs to report second-quarter numbers, fell 10.9 per cent on a disappointing update issued after Wednesday’s closing bell.
Blackstone’s shares were up by 0.4 per cent, paring stronger gains seen earlier in the session, after the US private equity powerhouse’s earnings beat forecasts and it reported assets under management of $545bn. Morgan Stanley was up 0.7 per cent after it reported a narrower quarterly loss than forecast.
Microsoft reports later in the day.
“The second-quarter earnings season in the US faces great expectations given the major indices at or nudging all-time highs,” said Richard Hunter, head of markets at Interactive Investor.
“That means the slightest disappointment, providing even the slimmest of entry points for the bears, will be pounced upon. Technology stocks in particular need to perform to perfection, given their spicy valuations. The remainder of the reporting season has its work cut out if current market levels are to be maintained.”
The index tracking the greenback ticked 0.1 per cent lower in the wake of comments from Treasury secretary Steven Mnuchin, who said there was “no change” to Washington’s dollar policy “as of now”.
In Europe, earnings from SAP missed forecasts, in part due to the impact of the trade dispute between China and the US. Shares in Germany’s most valuable company and the region’s largest software maker fell 5.6 per cent. It was the biggest single decliner on Frankfurt’s Xetra Dax 30, which dropped 0.9 per cent overall.
SAP’s plight hit the Stoxx index tracking European technology stocks. It fell 1.6 per cent, setting it on course for its biggest single-session fall since early January. London’s FTSE 100 lost 0.6 per cent and the wider, international Stoxx 600 was weaker by 0.2 per cent.
Japan’s Topix led losses in Asia with a fall of over 2 per cent, as the yen — viewed by investors as a haven — strengthened 0.2 per cent against the dollar. The Japanese index has now dropped for four consecutive sessions amid a recent flare in trade tensions with South Korea.
