NEW YORK (AP) — Stock indexes were posting slight losses in midday trading on Wall Street Wednesday as a sharp drop for railroad operator CSX pulled industrial companies broadly lower.
Banks were also falling as investors worry that lower interest rates will hurt their profits going forward.
Technology stocks bucked the downward trend and put up some solid gains. Qualcomm rose 1.1% following reports that the government asked a court to pause enforcement of an antitrust ruling. Microsoft, Intel and Adobe also rose.
Corporate earnings reports are getting into full swing this week, and investor have been mostly cautious in their assessments of them. Earnings are still expected to decline for S&P 500 companies in the second quarter.
CSX plunged 10.6% after saying it now expects its revenue to decline up to 2% this year, after previously saying it expected growth. Investors read that as trouble for the entire industry and sent the stock of other railroad operators lower. Union Pacific sank 5.3% and Norfolk Southern dropped 6%.
Abbott Laboratories gained 3.8% and pushed health care stocks higher after the maker of infant formula and drugs raised its financial forecast for the year. UnitedHealth Group also rose.
Several large companies are scheduled to report earnings later today and throughout the remainder of the week. Netflix will release its results after the market closes, as will IBM. UnitedHealth Group, Phillip Morris and Morgan Stanley are scheduled to release their results Thursday.
KEEPING SCORE: The S&P 500 index fell 0.3% as of 12:17 p.m. Eastern time. The Dow Jones Industrial Average fell 52 points, or 0.2%, to 27,282. The Nasdaq composite fell 0.1%. Small-company stocks did worse than the rest of the market. The Russell 2000 index fell 0.4%.
ANALYST'S TAKE: Corporate profits have so far been beating Wall Street forecasts. But investors are keeping a close watch on the picture that companies paint for the second half of the year.
"You're getting tempered guidance for the most part," said Lindsey Bell, investment strategist with CFRA Research. "It's more of a reality check. Second-half growth is not guaranteed at this point."
Investors are likely going to pause and take a more cautious approach going forward, she said, as stock values reach record highs. The technology-heavy Nasdaq is up more than 23% for the year and the broad S&P 500 is up more than 19%.
BLEMISHED FORECAST: Nu Skin Enterprises fell 16% after the seller of skin care and nutritional products slashed its profit and revenue forecast for the year. The company and other direct sellers of wellness products are facing increased scrutiny from the Chinese government and that is hampering sales growth. Nu Skin gets 33% of its revenue from China, according to FactSet.
SHARP UNIFORMS: Cintas rose 7.3% after the uniform rental company beat analysts' profit and revenue forecasts for its fiscal fourth quarter. The company also gave investors a solid profit forecast for its current fiscal year.