The Dow lagged the rest of the U.S. stock market on Tuesday after Walgreens admitted that its generic drug business struggled last quarter, raising fresh alarm over the health of Wall Street corporate earnings.
The Dow Jones Industrial Average was off by as much as 136 points on Tuesday, reflecting a shaky pre-market session for U.S. stock futures. The blue-chip index would settle down 79.29 points, or 0.3%, at 26,179.13 Twenty-one of 30 index members traded lower.
The broad S&P 500 Index of large-cap equities fluctuated between gains and losses before settling flat at 2,867.24. Losses were mainly concentrated in just two sectors – energy and consumer staples. On the opposite side of the spectrum, communication services and the smaller real estate component led the rally.
Meanwhile, the technology-focused Nasdaq Composite Index resumed its uptrend, gaining 0.3% to 7,848.69. The index is still a way off from its record high north of 8,100.
Shares of Walgreens Boots Alliance (WBA) plunged on Tuesday after the company reported quarterly earnings and revenue that missed analysts’ forecasts, setting the stage for a difficult year ahead for the Dow blue chip. WBA stock was off by nearly 13%, officially its worst day since 2014.
For its most recent quarter, the company reported adjusted per-share earnings of $1.65 on revenues of $34.53 billion. Both numbers missed analysts’ expectations. Walgreens also lowered its guidance for the rest of the year and warned of challenging economic conditions in the near future.
U.S. large caps likely experienced a difficult quarter, prompting analysts to downgrade their profit outlook for the first quarter. According to The Wall Street Journal , S&P 500 companies are expected to report a year-over-year profit decline of 4%, marking the first contraction since 2016.
Markets were also pressured by disappointing economic data after the Commerce Department reported a big drop in durable goods orders.
Orders for long-lasting durable goods fell 1.6% in February following a downwardly revised gain of 0.1% the month before. Nondefense capital goods excluding aircraft, a proxy for business spending plans, edged down 0.1%, official data showed.