Dow Closes 250 Points Lower for Back-To-Back Losses, Reopening Plays Lead Decline


U.S. stocks fell for a second day on Tuesday as strong corporate earnings failed to boost a market already near record highs, while an alarming rise in global Covid cases raised concerns about the recovery.

The Dow Jones Industrial Average fell 256.33 points, or 0.8%, to 33,821.30 as Boeing and Nike both dropped more than 4%. The S&P 500 lost 0.7% to 4,134.94 for a second straight day of declines, while the tech-heavy Nasdaq Composite dipped 0.9% to 13,786.27.

Reopening plays such as airlines and cruise line operators led losses on Tuesday. United Airlines plunged 8.5% after the carrier reported its fifth consecutive quarterly loss and said that business and international travel recovery is still far off. American Airlines fell 5.5%, while Carnival and Norwegian Cruise Line both slid over 4%.

The sell-off in shares that are tied to a successful reopening came as the World Health Organization warned that global coronavirus infections were edging toward their highest level in the pandemic. In the U.S., while the country is maintaining a pace of 3 million reported vaccinations per day, about 67,100 daily new infections are still being recorded.

Meanwhile, the robust earnings season did little to lift the market. Many on Wall Street believe much of the upbeat earnings news has already been priced into the market, which had been climbing steadily to record after record. The Dow and S&P 500 closed at records on Friday and the Dow crossed above the 34,000 level for the first time ever last week.

Procter & Gamble shares rose 0.8% after the consumer giant reported quarterly earnings that beat expectations with pandemic home-care trends lingering and beauty sales picking up.

"By now, we are all used to companies beating analyst estimates," said Tom Essaye, founder of Sevens Report. "The key ... will be the sustainability of these earnings increases. Most of the factors that are producing these blowout earnings results are typically considered one-offs."

The first-quarter earnings season got off to a strong start with 90% of the S&P 500 companies that have reported so far topping expectations by more than 20% on average. The beat rate is three times the historical average, according to data from Earnings Scout.

Johnson & Johnson shares gained 2.3% following better-than-expected earnings and revenue. The company also reported $100 million in first-quarter sales of its Covid-19 vaccine that's on hold in the U.S. while health regulators investigate a rare blood-clotting issue.

Another Dow component, Travelers Companies, edged up 0.9% after quarterly results that topped Wall Street's estimates. The company also raised its quarterly cash dividend and approved an additional $5 billion of share buybacks. 

"Markets are a little stretched at this point, so we may see stocks take a small step back here and there," said Callie Cox, senior investment strategist at Ally Invest. "That's normal, and we'd expect any dip to be bought quickly."

Tesla rebounded slightly after dropping more than 3% in the previous session as bitcoin — which makes up some of Tesla's balance sheet— tanked over the weekend.

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