Wall Street lower on growth, profit concerns

Trader Joseph Lawler works on the floor of the New York Stock Exchange. File photo / AP

Wall Street fell overnight amid concern about the outlook for worldwide economic growth and corporate profits as the latest round of quarterly earnings in the US shows some companies including Allstate and CVS Health are disappointing investors.

"We've seen a lot of companies struggling this earnings season," Randy Warren, who manages more than US$100 million at Exton, Pennsylvania-based Warren Financial Service & Associates, told Bloomberg. "There are a lot of global growth concerns out there."

In late trading in New York, the Dow Jones Industrial Average fell 0.23 percent, the Standard & Poor's 500 Index slid 0.20 percent, while the Nasdaq Composite Index slipped 0.13 percent.

Declines in shares of Apple and those of Exxon Mobil, last down 2.9 percent and 1.1 percent respectively, led the Dow lower.

A report on Monday raised concern about a drop in Apple's relative market share in China.

"Apple has been the weak sister in the market today. That's having an outsized impact," Alan Gayle, senior investment strategist and director of asset allocation at RidgeWorth Investments in Atlanta, Georgia. "But if you look at the sectors, most everything is down with the exception of materials."

It wasn't all gloom and doom however.

Shares of Netflix climbed as much as 9.1 percent to a record high after Guggenheim Securities recommended the stock with a price target of US$160, the highest of any analyst covering the company, according to Bloomberg.

The Commerce Department said factory orders gained 1.8 percent in June, following a 1.1 percent slide in May.

Investors are awaiting Friday's government non-farm payrolls report to gauge the odds Federal Reserve policy makers will raise interest rates at their next meeting in September. Friday's report is expected to show US employers added 225,000 jobs in July, while the jobless rate held at 5.3 percent.

"The market is getting such a mixed bag of rhetoric from the Fed, it seems like the Fed isn't sure what it's going to do," Jack Ablin, chief investment officer at BMO Private Bank in Chicago, told Reuters.

At least one regional Fed chief has made his position clear.

Atlanta Fed president Dennis Lockhart told the Wall Street Journal that he's set to vote for a rate rise in September. "I think there is a high bar right now to not acting, speaking for myself," Lockhart said. "It will take a significant deterioration in the economic picture for me to be disinclined to move ahead."

In Europe, the Stoxx 600 Index ended the session with a 0.2 percent decline from the previous close. The UK's FTSE 100 Index slipped 0.03 percent, while France's CAC 40 Index fell 0.16 percent. Germany's DAX Index rose 0.1 percent.

Shares of BMW fell 1.3 percent. "If conditions on the Chinese market become more challenging we cannot rule out a possible effect on the BMW Group's outlook," the carmaker warned.

Greece's ASE Index fell 1.2 percent, following Monday's 16 percent plunge.