U.S. stocks slid Tuesday amid disappointing first-quarter earnings reports from industrial giants like Caterpillar and 3M, and from tech companies like Alphabet, the parent company of Google.
The Dow Jones Industrial Average closed at 24,024, down 424 points or 1.74 percent, on April 24. Meanwhile, the Nasdaq closed down 1.7 percent, while the S&P 500 dropped 1.34 percent. This is the fifth day in a row that the Dow Jones has dropped.
While corporate earnings across the board for the first quarter ended March 31 have generally been positive so far, that was not enough to buoy the overall stock market.
"Earnings have been much better than people have expected, but the reason [the stock market] has not done better is because people are concerned about higher rates and high levels of input costs," Patrick Spencer, vice chairman of equities at Baird, told the Wall Street Journal. "On conference calls, companies are talking about transport costs and commodity costs, and they're a headwind."
Phil Davis of PSW Investments told AFP, "Earnings are good but not great. It's impossible to live up to the expectations."
However, as more companies report earnings over the next few weeks, things could change, said Kate Warne, principal investment strategist at Edward Jones. "We could see more response as we get into the heart of earnings season," Warne said.
Facebook will report earnings after the market close on April 25. Despite the stock getting pummeled in the wake of its data-breach scandal, analysts have a bullish first-quarter earnings outlook for the social-media juggernaut.
Facebook is expected to post adjusted 1Q earnings of $1.36 per share, up 30 percent from $1.04 last year. Facebook's first-quarter revenue is expected to come in at $11.4 billion — a 43 percent spike from the year-ago quarter.
Similarly, Twitter is expected to report its second consecutive profitable quarter. A consensus of analysts estimated Twitter's first-quarter adjusted earnings at 12 cents a share on revenue of $609 million, up 11 percent from the year-ago quarter.
Market observers hope these robust earnings reports from Facebook and Twitter will bolster the flailing tech sector and help boost the overall stock market. Stay tuned.