Q1 Earnings and Geopolitical Uncertainty Weigh on Wall Street

Q1 Earnings and Geopolitical Uncertainty Weigh on Wall Street

US stocks declined today, weighed down by drops in Goldman Sachs and Johnson & Johnson in the wake of their quarterly results, while geopolitical tensions and disarray continued to fuel investor caution.



Image by Getty

Goldman Sachs lost 4.7 percent to $215.58 after hitting its lowest level since Nov. 29 following earnings that missed expectations as trading revenue dropped. Goldman shares were on track for their biggest daily percentage drop since June 24, a day after Britain voted to leave the European Union. And Johnson & Johnson slumped 3.3 percent and was on pace for its worst day in over eight years after the company's quarterly revenue fell short of analysts' expectations. Both companies tend to be known for managing their earnings a little better, than most. The fact they have missed perhaps isn’t a very good indication.

The Dow Jones Industrial fell 109.25 points, or 0.53 percent, to 20,527.67, the S&P 500 lost 6.25 points, or 0.27 percent, to 2,342.76 and the Nasdaq dropped 10.11 points, or 0.17 percent, to 5,846.68.

There seems to be some nervousness out there about the economy, geopolitical issues and general unpredictability as well, and it is taking its toll on investors. Healthcare, down 1.0 percent, and financials, off 0.6 percent, were the two worst-performing of the 11 major S&P sectors. Cardinal Health was down 11.4 percent, also weighed on healthcare after a disappointing profit forecast overshadowed a deal to buy medical supplies businesses from Medtronic for $6.1 billion.

Safe-havens continued to be in favor, with gold and US Treasury prices climbing ahead of crucial presidential elections in France, rising tensions between the United States and North Korea and the early calling of elections in Britain.

Despite the high profile earnings misses, first quarter results have been promising overall. According to Thomson Reuters data through Tuesday morning, of the 45 companies in the S&P 500 that have reported results, 76 percent have topped expectations.

Across the Atlantic, the FTSE 100 Index lost 2.46 percent, the most since June, while the pound surged against the dollar. Prime Minister May said she was calling the election “with reluctance” but that the UK needs stability during Brexit negotiations. Polls show her Conservative Party is more than 20 points ahead of the main opposition.


This information has been prepared by Nadex, a trading name of North American Derivatives Exchange, Inc., prepared by independent third parties contracted by Nadex or reproduced form third party news agencies. In addition to the disclaimer below, the material on this page does not contain an offer of, or solicitation for, a transaction in any financial instrument. Nadex accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.