US STOCKS-Nasdaq set for worst day in 2 months before big tech earnings
* GE rises on strong cash flow position
* Chinese stocks extend declines
* Indexes down: Dow 0.63%, S&P 1.00%, Nasdaq 2.07% (Updates comment, prices)
By Ambar Warrick
July 27 (Reuters) – U.S. stock indexes retreated from record highs on Tuesday, with the Nasdaq tumbling as much as 2.1% as caution kicked in ahead of earnings reports from some of the most valuable technology companies on Wall Street.
“Professional investors are afraid that many of the companies in earnings seasons so far have been doing very well, but not necessarily moving up their guidance for the second half of the year to be as strong as the first half,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.
All of the heavyweight technology companies due to report this week were sporting recent record highs, with investors piling into them on their perceived resilience to COVID-related disruptions.
Facebook, which is set to report earnings on Wednesday, sank 1.9%.
At 12:06 p.m. ET, the Dow Jones Industrial Average was down 222.04 points, or 0.63%, at 34,922.27 and the S&P 500 was down 44.22 points, or 1.00%, at 4,378.08.
The Nasdaq Composite was down 307.84 points, or 2.07%, at 14,532.87. The tech-heavy index was set for its worst day since mid-May.
Investors also remained on edge ahead of more cues from the Federal Reserve on when it intends to begin reining in its massive stimulus program, with a two-day meeting kicking off on Tuesday.
Defensive sectors such as real estate and utilities were among the best-performing S&P sectors for the day. Treasuries rose and yields also retreated as investors positioned for the Fed meeting.
Wall Street’s main indexes had inched up to record closing highs on Monday, carrying over momentum from a strong batch of corporate earnings last week.
Of the S&P 500 constituents, 153 companies have reported earnings so far and 88.9% of them have beaten estimates, according to Refinitiv data.
Electric-car maker Tesla Inc fell 3.6%, as concerns over production being hit by a semiconductor shortage offset initial optimism over a better-than-expected second-quarter profit.
U.S.-listed Chinese stocks extended losses as fears over more regulations in the mainland persisted. Alibaba and Baidu lost about 5.5% and 4.5%, respectively.
General Electric rose around 0.3% after lifting its annual free cash flow forecast. But the company, once a bellwether for U.S. economic activity, warned that it was facing inflationary pressures that were likely to intensify in the rest of the year.
Intel Corp sank 3.5% after it said its factories would start building Qualcomm chips and laid out a roadmap to expand its new foundry business.
The S&P index recorded 40 new 52-week highs and no new lows, while the Nasdaq recorded 29 new highs and 202 new lows.
(Reporting by Ambar Warrick in Bengaluru; Editing by Arun Koyyur, Aditya Soni and Maju Samuel)