Stocks slip after latest raft of earnings; Netflix drops: Live updates

Stocks fell on Wednesday as traders assessed the latest batch of corporate earnings.

The Dow Jones Industrial Average traded 150 points lower, or 0.3%. The S&P 500 fell 0.3%, while the Nasdaq Composite shed 0.6%.

Netflix shares slumped 9% after the company posted an earnings miss, citing a dispute with Brazilian tax authorities as a reason for the results. Shares of Texas Instruments also came under pressure, dropping 4%, after its latest earnings results similarly came in weaker than expected. The semiconductor company’s fourth-quarter earnings forecast was disappointing as well.

On the flip side, Intuitive Surgical shares rallied 15% on the back of its strong earnings and revenue results.

“Traders seem to be growing hesitant to take stock markets higher so far today,” Thierry Wizman, global FX and rates strategist at Macquarie Group, said in a note. “Perhaps amid reports that US corporate earnings outcomes for Q3 have been much better than expected, there may remain some worries about guidance from management as the US corporate earnings season expands to encompass more stocks and more sectors.”

“Moreover, the few high-profile reports were issued overnight (e.g., Netflix, Texas Instruments) have been downbeat in tone, he continued. “Still, the fact that the S&P 500 index remains near its high is a testament to the veracity of two positive narratives.”

The Dow is coming off a record-setting session, briefly topping 47,000 on Tuesday, thanks to strong results from Coca-Cola and 3M. The S&P 500 and Nasdaq lagged, however, after President Donald Trump commented about his expected meeting next week with Chinese President Xi Jinping. He noted that “maybe it won’t happen.”

Still, investors are hopeful that the flurry of upcoming earnings reports could be the next catalyst that U.S. equities need to keep rallying. Tesla’s earnings expected Wednesday after the bell will kick off highly-awaited reports from the “Magnificent Seven” megacap tech group. More than three-quarters of the S&P 500 companies that have posted results so far have beaten expectations, according to FactSet.

The September consumer price index report due Friday is another key event traders are awaiting this week, particularly because all other data releases have been suspended during the U.S. government shutdown, which is now in its 22nd day. The inflation data should give central bankers more information ahead of their upcoming meeting in late October.

Markets are widely expecting the Federal Reserve to announce a quarter percentage point reduction in the overnight borrowing rate, and likely another cut in December.