Stocks slipped Tuesday as traders assessed the latest quarterly figures from several major companies, while awaiting reports from key tech names.
The Dow Jones Industrial Average fell 292 points, or 0.9%. The S&P 500 lost 1.3%, while the Nasdaq Composite slid 1.6%.
Shares of First Republic Bank slid almost 30% after the regional bank posted its latest quarterly results. The bank said late Monday that deposits dropped 40% to $104.5 billion in the first quarter but have since stabilized.
First Republic will also be trimming expenses, including slashing headcount by 20% to 25% in the second quarter. The regional bank has been closely followed after investors grew concerned it could face the same fate as Silicon Valley Bank and Signature Bank, whose closures set off an industry crisis last month. First Republic shares have fallen more than 90% so far this year.
Both the SPDR S&P Regional Banking ETF (KRE) and SPDR S&P Bank ETF (KBE) lost just under 2% as financials weighed on the market. Western Alliance Bancorp and PacWest each slid 4%, while Charles Schwab each shed almost 3%.
“There’s still some skittishness on the Street that there could be some hidden dangers from these regional banks,” said Dustin Thackeray, chief investment officer at Crewe Advisors. “You’re seeing some cautiousness with that, but then mixed with positive earnings. It’s been, generally, a good earnings season so far.”
UPS dropped 9% on the back of quarterly results that missed Wall Street’s expectations and commentary from management that indicated sales volumes were — and should continue to be — under pressure. PepsiCo, on the other hand, rose more than 2% on better-than-expected numbers.
Microsoft and Alphabet are slated to report Tuesday after the bell, the first of multiple Big Tech names on the earnings schedule this week. But those stocks could struggle, according to George Ball, chairman of Sanders Morris Harris, who said large-cap tech may not be a market leader the remainder of the year after its early-2023 rally.
Alphabet shares fell slightly ahead of the Google-parent’s earnings after the market closes. The company has been on an earnings cold streak, missing Wall Street estimates the last four quarters, according to Bespoke Investment Group.
“The tech rebound since the start of 2023 is over,” Ball said. “It is almost impossible for big tech companies to continue growing revenue at the robust pace they have been used to over the past few years.”
Correction: A previous version misstated when Amazon reports earnings.