S&P 500 falls to start August as the busiest week of the earnings season continues: Live updates

The S&P 500 fell to start August as investors navigated a flood of corporate earnings reports and assessed a fresh batch of economic data.

The broad-based index lost 0.3%, while the Nasdaq Composite pulled back 0.5%. The Dow Jones Industrial Average hovered near the flatline.

Pharmaceutical giant Merck reported a smaller-than-expected loss and revenue that exceeded expectations thanks to strong Keytruda sales. Merck shares rose 1.6%. Caterpillar also reported better-than-expected earnings and revenue, boosting shares 7%.

Pfizer added 1.7% even after posting mixed results due to plummeting Covid product sales, while Uber lost nearly 5% on mixed earnings.

“We’ve had a market that’s been so strong for so many days that you get these strings of record highs on indices — basically, what feels like a relief rally that economic doom is not upon us,” said Tim Lesko, managing director at Mariner Wealth Advisors.

Tuesday’s moves, he said, are likely a reaction to overbought conditions given the strength of earnings so far this season.

This week marks the busiest stretch of second-quarter earnings with more than 160 S&P 500 constituents slated to report results. More than half of the companies in the broad market index have already reported, with 82% topping earnings expectations, according to FactSet. This has fueled some hopes that the economy will be able to avoid a recession as inflation shows signs of cooling.

Despite the performance so far, analysts are bracing for a 7.1% earnings decline from a year ago, according to FactSet, and a third consecutive quarter of falling profits.

Wall Street also assessed a fresh batch of critical economic indicators offering more insight into the state of the economy. That included job openings data that came in slightly below expectations and manufacturing data that showed a continued contraction.