US STOCKS-S&P 500, Dow slip on worries about earnings, U.S. stimulus outlook

  • Reuters
  • Stock Market News
US STOCKS-S&P 500, Dow slip on worries about earnings, U.S. stimulus outlook
Credit: © Reuters.

* Xilinx jumps on $35 bln buyout deal from AMD

* Eli Lilly (NYSE: LLY ) still optimistic after COVID-19 trial set-back

* Microsoft gains ahead of big tech results this week

* Indexes: Dow down 0.5%, S&P down 0.1%, Nasdaq up 0.6% (New throughout, updates prices, market activity and comments to market close)

By Herbert Lash

NEW YORK, Oct 27 (Reuters) - Stocks on Wall Street closed little changed on Tuesday, with the Dow and S&P 500 dipping on disappointing earnings and little hope for a U.S. coronavirus stimulus before Election Day, though the Nasdaq rose ahead of big technology company results.

Investor sentiment sagged after the White House said a deal on COVID-19 relief could come in "weeks," meaning a deal is unlikely before the Nov. 3 election. the tech-heavy Nasdaq rose as Microsoft Corp MSFT.O firmed in the run-up to its results after the closing bell, and the technology heavyweights supported the S&P500.

Shares of drugmaker Eli Lilly and Co LLY.N fell after quarterly profits took a hit from increased costs to develop a COVID-19 treatment and after a trial of its antibody therapy failed to show a benefit in hospitalized patients. pullback that we've seen is a little bit more of a risk-off move as an additional stimulus package now has been pushed aside," Kevin Flanagan, head of fixed income strategy at WisdomTree Investments, said. "That led to some disappointment."

On Monday, the three major U.S. stock indexes posted their biggest declines in about four weeks on a record number of new coronavirus cases in the United States and some European countries, and as the elusive stimulus rattled investors.

Sectors sensitive to economic growth took a hit, with both the S&P 500 banks index .SPXBK and the S&P energy sector .SPNY closing lower.

Meanwhile, Wall Street's fear gauge .VIX hovered at its highest level since early September on election jitters. challenger Joe Biden leads President Donald Trump in nationwide polls but the race is much tighter in battleground states which should determine the outcome.

Unofficially, the Dow Jones Industrial Average .DJI fell 221.37 points, or 0.8%, to 27,464.01, the S&P 500 .SPX lost 10.23 points, or 0.30%, to 3,390.74 and the Nasdaq Composite .IXIC added 72.41 points, or 0.64%, to 11,431.35.

The Nasdaq rose in anticipation of results later this week from Apple Inc AAPL.O , AMZN.O , Google-parent Alphabet GOOGL.O and Facebook Inc FB.O . The tech bellwethers together account for about a fifth of the S&P 500's total value. NYSE FANG+TM Index .NYFANG rose about 1.69%.

Analysts expect the tech sector to post a 0.4% increase in third-quarter earnings from a year earlier, while overall S&P 500 profit is forecast to fall 16.2%, according to Refinitiv data.

Concerns over a rise in U.S. coronavirus cases are weighing on the market but the technology sector seems to be the least exposed, said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey.

"A focus on big technology companies may move this market to rally despite the problems the virus is creating," he said.

Semiconductor designer Advanced Micro Devices Inc AMD.O fell as it agreed to buy Xilinx Inc XLNX.O in a $35 billion all-stock deal. Xilinx shares soared, the largest gainer on the Nasdaq 100 , while those of AMD-rival Intel INTC.O fell. American International Group Inc (NYSE: AIG ) AIG.N gained after its board named Peter Zaffino as chief executive officer and approved a plan to separate the life and retirement business from the rest of the company.

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