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 early trading. It slipped modestly on Monday after coming off a sixth straight winning week, its longest such streak of the year.
The Dow Jones Industrial Average dipped 91 points, or 0.2%, and likewise fell further from its all-time high set on Friday. The Nasdaq composite was 0.5% lower, as of 9:35 a.m. Eastern time.
Kimberly-Clark tumbled 4.5% even though the company behind Kleenex, Huggies and Scott tissue reported stronger profit for the latest quarter than analysts expected. Its revenue fell short of forecasts, and it also said it now expects an underlying measure of revenue to grow between 3% and 4% this year over 2023. It had earlier been forecasting a “mid-single digit rate” of growth.
Verizon Communications sank 6.2% after it likewise reported weaker revenue for the latest quarter than expected, even though its profit edged past forecasts.
Sherwin-Williams dropped 3.6% 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 3M, which rallied 4% after reporting stronger profit and revenue than analysts expected. The company behind Scotchgard, Post-it notes and Ace bandages also raised the bottom end of its forecasted range for profit over the full year.
Stocks have 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 4.16% 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, many of those same traders were betting on three quarters of a percentage point or even a full point.
In stock markets abroad, European indexes were modestly lower even though German software giant SAP rose after nudging past profit expectations.
Indexes in Asia were mixed.
AP Business Writers Yuri Kageyama and Matt Ott contributed.
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