NEW YORK (AP) — U.S. stocks are slipping again on Tuesday, and the S&P 500 is on track for its first back-to-back loss in a month and a half as Wall Street's record-breaking rally loses more momentum.
The S&P 500 was 0.4% lower in morning trading. It also fell modestly on Monday after coming off a sixth straight winning week, its longest such streak of the year.
The Dow Jones Industrial Average dipped 175 points, or 0.4%, and likewise fell further from its all-time high set on Friday. The Nasdaq composite was 0.2% lower, as of 10 a.m. Eastern time.
GE Aerospace was one of the heaviest weights on the stock market after tumbling 7.2%. The company, which began trading independently this spring after splitting off from the former conglomerate General Electric, reported stronger profit for the latest quarter than analysts expected, but its revenue fell short of forecasts.
Verizon Communications sank 4.6% after it likewise reported weaker revenue for the latest quarter than expected, even though its profit edged past forecasts.
Genuine Parts, which sells automotive and industrial replacement parts, dropped 18.5% for one of the largest losses in the S&P 500 after its profit for the latest quarter fell well short of expectations. CEO Will Stengel said much of the shortfall was due to continued weakness in Europe and its industrial business.
Sherwin-Williams sank 2.8% after both its profit and revenue came in weaker than analysts expected. CEO Heidi Petz cited a “tough macroeconomic environment” and “continued choppiness in the demand environment” for its paints and coatings. Demand from do-it-yourself customers in North America remains weak given the higher debt levels that they’re carrying and still-lingering inflation.
Helping to keep the market's losses in check was General Motors. It drove 7.6% higher after delivering stronger profit and revenue than expected. It benefited from stronger sales to individual U.S. customers, even as sales slowed to large fleet buyers.
Philip Morris International rallied 7.3% after likewise topping forecasts for both profit and revenue. CEO Jacek Olczak said the company is seeing momentum across regions and business lines, including growth for both its smoke-free business and for its combustible cigarettes.
Norfolk Southern rose 3.3% after the railroad topped analysts' forecasts for profit.
Stocks have generally slowed their record-breaking momentum this week under increasing pressure from rising Treasury yields in the bond market.
The yield on the 10-year Treasury eased back on Tuesday to 4.18% from 4.20% late Monday. But it’s still well above the 4.08% level it was at just on Friday. Higher yields for Treasurys can make investors less willing to pay high prices for stocks, which critics say already look too expensive.
Treasury yields have been climbing following a raft of reports showing the U.S. economy remains stronger than expected. That's good news for Wall Street, because it bolsters hopes that the economy can escape from the worst inflation in generations without the painful recession that many had believed to be inevitable.
But it also is forcing traders on Wall Street to ratchet back their expectations for how much the Federal Reserve will cut interest rates. The central bank has made the drastic shift to lowering interest rates in hopes of keeping the economy strong, but a more resilient-than-expected economy wouldn't need as many cuts.
Traders are now largely expecting the Fed to cut its main interest rate by half a percentage point more through the end of the year, according to data from CME Group. A month ago, some of those same traders were betting on the federal funds rate ending the year as much as half a percentage point lower than that.
In stock markets abroad, European indexes were mixed after German software giant SAP rose after nudging past profit expectations. In Asia, Japan's Nikkei 225 dropped 1.4%, and South Korea's Kospi fell 1.3%, but indexes were more resilient in China.
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AP Business Writers Yuri Kageyama and Matt Ott contributed.
