U.S. stocks were moving lower in morning trading Tuesday, dragged down by big communications companies after Google‘s parent company, Alphabet, reported a slowdown in revenue growth.
Alphabet is one of many huge U.S. companies to report their results this week, giving investors plenty to focus on. Nearly a third of the companies in the S&P 500 are scheduled to report their results for the first quarter this week. For the most part, the first-quarter earnings, while mixed, have come in better than the modest expectations analysts had.
The few sectors to post gains in morning trading included safe-play companies like utilities and makers of consumer products, which investors tend to favor when they’re feeling fearful. Energy companies were also higher as the price of oil rose.
General Electric, which has taken a beating in recent years, rose sharply in heavy trading after delivering surprisingly good earnings. That helped lift other industrial stocks.
Health care stocks gave up early gains after being weighed down by Eli Lilly and UnitedHealth Group. Drugmaker Eli Lilly cut its revenue forecast for the year as it faces price declines and more competition for its drugs. On the other end of the sector, Merck rose after reporting that its profit quadrupled in the first quarter, easily beating Wall Street’s forecasts. Pfizer, another huge drugmaker, rose after higher sales of prescription drugs helped it report a 9% jump in profits, also easily beating forecasts.
KEEPING SCORE: The S&P 500 fell 0.4% as of 11:25 a.m. The Dow Jones Industrial Average fell 0.3%, or 70 points, to 26,483. The Nasdaq composite rose 1.1%.
BAD SEARCH: Google parent company Alphabet slumped 8.4% in heavy trading after disappointing advertising sales held back revenue growth during the first quarter.
The search engine’s revenue fell short of analysts’ forecasts because advertising revenue only grew by 15%. The company is in tight competition for digital ads with Facebook and Amazon.
DENTED FENDER: General Motors fell 3.2% after reporting a surprise drop in sales during the first quarter. The company raised prices on its vehicles, especially trucks, during the quarter.
The automaker has been criticized for its decision to late last year to shut four U.S. factories and one in Canada. It said the closings and job cuts are necessary to stay financially healthy.
MORE POWER: Industrial conglomerate General Electric rose 4.6%, also in heavy trading, after beating Wall Street’s profit and revenue forecasts for the second straight quarter.
The company has been shedding units and reorganizing as it tries to increase growth. Solid results from its struggling power unit helped lift its results during the most recent quarter.
ROADHOUSE BLUES: Restaurant operator Texas Roadhouse fell 11% after profit fell because of higher labor costs. Both profit and revenue fell short of forecasts.
The company, which operates about 580 Texas Roadhouse and Bubba’s 33 restaurants, doesn’t expect those costs to fall. It raised prices earlier this year to try and offset the higher costs.