NEW YORK -- U.S. stocks fell Tuesday after weak first-quarter reports from Johnson & Johnson and Goldman Sachs frustrated investors who hope that company earnings are on the rise. Health care companies lost the most.
The Standard & Poor's 500 index shed 6.82 points, or 0.3 percent, to 2,342.19. The Dow Jones industrial average lost 113.64 points, or 0.6 percent, to 20,523.28. Goldman Sachs was responsible for most of that loss.
The Nasdaq composite fell 7.32 points, or 0.1 percent, to 5,849.47. The Russell 2000 index of small-company stocks recovered from an early loss and rose 0.71 point, close to 0.1 percent, to 1,361.89.
Wall Street has high hopes for company earnings this spring, and weak results from the world's largest health care-products company and one of the biggest financial firms had them concerned. Johnson & Johnson took its biggest one-day loss in a year. Investors also looked for safety after the British government called for a surprise early election. Bond prices and the pound rose, and European stock indexes tumbled.
Kate Warne, an investment strategist for Edward Jones, said Goldman Sachs and Johnson & Johnson had a dramatic effect on stocks because investors expect a very strong round of company earnings reports this month. According to S&P Global Market Intelligence, investors expect first-quarter earnings for S&P 500 companies to rise almost 10 percent compared with last year. That would be the biggest jump since 2014.
"The reason it's so important is that the stronger growth is likely to support higher stock prices even in the absence of pro-growth policies from the [Donald] Trump administration," she said.
On Monday, stocks made their biggest gain in six weeks. But over the past few weeks, they've mostly drifted lower while bond yields have fallen to five-month lows.
Johnson & Johnson stumbled after investors were disappointed with its sales. Revenue from its biggest-selling drug, the Crohn's disease treatment Remicade, fell 6 percent.
The maker of Tylenol and Band-Aids lost $3.90, or 3.1 percent, to $121.82.
Goldman Sachs' revenue fell short of investor projections in the first quarter as its highly regarded trading desks didn't perform as well as their competitors. The stock fell $10.67, or 4.7 percent, to $215.59, its biggest loss since June. The stock reached record highs above $250 a share in March.
British Prime Minister Theresa May reversed her position by calling for an early general election in June. May formally triggered the U.K.'s exit from the European Union last month, and she intends to seek a stronger parliamentary mandate.
European stocks fell, as the British vote creates even more political uncertainty in Europe days before the first round of French presidential voting.
As investors snapped up government bonds, prices jumped. The yield on the 10-year Treasury note fell to 2.18 percent, its lowest since Nov. 11. It finished at 2.25 percent Monday.
Investors also bought shares of companies that pay big dividends. Companies such as Kraft Heinz and Molson Coors finished higher, along with utilities, real estate investment trusts and phone companies.
U.S. crude oil futures lost 24 cents to $52.41 a barrel in New York. Brent crude, used to price international oils, lost 47 cents to $54.89 per barrel in London.
Gold rose $2.20 to $1,294.10 an ounce. Silver skidded 24 cents, or 1.3 percent, to $18.27 an ounce. Copper fell 7 cents, or 2.6 percent, to $2.53 a pound.
Business on 04/19/2017