Stocks trade mixed as investors’ focus shifts to earnings.
The U.S. stock market traded mixed-to-lower on Tuesday, as investors shifted their attention to fourth-quarter earnings season.
The major indices diverged at the end of closing, with the Dow Jones Industrial Average (DIA) emerging as the sole winner. The blue-chip index closed up 31.34 points, or 0.1%, at 28,938.39. That was a new record high. The Dow briefly traded above 29,000 earlier in the day.
Large-cap stocks were mostly lower, with the S&P 500 Index (SPY) edging down 0.2% to 3,282.93. Nine of 11 primary sectors finished in the red. Energy and information technology stocks were among the worst performers. Health care was the only component to report gains.
Meanwhile, the technology-focused Nasdaq Composite Index (QQQ) closed down 0.2% at 9,251.33.
A measure of implied volatility known as the CBOE VIX (VXX) rebounded on Tuesday but continued to trade well below the long-term average. The so-called “investor fear index” advanced 1.4% to 12.49 on a scale of 1-100 where 20 represents the historic average. It previously touched an intraday high of 13.82.
Fourth-quarter earnings season is officially underway, with several Wall Street blue-chips scheduled to report this week. Analysts are once again forecasting a disappointing reporting period.
According to FactSet, a financial research firm, S&P 500 companies are on track to report a 2% earnings decline year-over-year. That would mark the fourth straight quarter of declining profits, the longest stretch in four years.
The Final Word: Despite the grim outlook, U.S. banks got off to a mostly positive start to earnings season. Dow component JPMorgan and Citigroup released strong fourth-quarter results.