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NEW YORK — Wall Street is slipping Tuesday after a torrent of companies gave mixed earnings reports for the first three months of the year.
The S&P 500 was 0.4% lower in early trading. The Dow Jones Industrial Average was down 23 points, or 0.1%, at 33,851, as of 9:45 a.m. Eastern time, while the Nasdaq composite was 0.5% lower.
First Republic Bank tumbled nearly 30% for the sharpest loss in the S&P 500 after it said customers withdrew more than $100 billion in deposits during the first quarter. That doesn’t include $30 billion that big banks plugged in to build faith in their rival after the second- and third-largest U.S. bank failures in history shook confidence.
The size of the drop in deposits overshadowed First Republic’s beating analysts’ expectations for earnings at the start of the year.
The majority of companies so far this reporting season have been topping expectations, but the bar was set considerably low. Analysts are forecasting the worst drop in S&P 500 earnings since the spring of 2020, when the pandemic froze the global economy.
UPS fell 8.6% after it met profit forecasts but said it made less in revenue than expected. It also said its results for the full year will likely come at the low end of its prior forecast, citing a challenging economy and other factors.
GE Healthcare Technologies dropped 9.7%, and Danaher fell 5.3% despite both reporting better earnings and revenue than expected.
On the winning side, PepsiCo rose 1.6% after beating profit expectations. Homebuilder PulteGroup rose 2.8% after also topping forecasts.
The heart of earnings reporting season is arriving, and more heavy hitters are coming after trading closes for the day.
Microsoft and Google’s parent company, Alphabet, are both on the schedule. Because they’re two of the biggest companies on Wall Street by market value, their stock movements carry extra weight on the S&P 500 and other market indexes.
Expectations are broadly low for corporate profits because inflation remains high, interest rates are much higher than a year ago and big chunks of the economy outside the job market are either slowing or contracting.
On Thursday, the U.S. will give its first estimate of how much the economy grew during the first three months of the year. Economists expect to see growth cooled to a 1.9% annual rate, down from 2.6% at the end of 2022.
Much of the slowdown is due to all the hikes in interest rates the Federal Reserve has carried out over the last year. It’s trying to bring down high inflation, but its main tool to do so is a notoriously blunt one that works by slowing the entire economy and hurting investment prices.
The Federal Reserve meets next week, and much of Wall Street expects it to raise interest rates at least one more time before pausing.
In the bond market, the yield on the 10-year Treasury fell to 3.41% from 3.50% late Monday. It helps set rates for mortgages and other important loans.
The two-year yield, which moves more on expectations for Fed action, fell to 4.02% from 4.11%.
In markets overseas, stock markets in Europe and Asia were mixed.
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AP Business Writers Joe McDonald and Matt Ott contributed.
