Wall St ends choppy session lower

·2-min read

US stocks have ended a choppy session lower as investors grew nervous ahead of the third-quarter earnings reporting season.

Supply chain problems and higher costs for energy and other things have fuelled concern about earnings, set to kick off with JPMorgan results on Wednesday.

Indexes reversed early gains after midday and added to losses just before the close.

JPMorgan shares were down 2.1 per cent and among the biggest drags on the S&P 500 along with Amazon, which fell 1.3 per cent.

The S&P financial index was down 1 per cent, while communication services dropped 1.5 per cent.

"The market is a bit cautious going into this earnings season," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

"Supply chain issues may have impacted earnings for a number of companies and certain industries more than others."

While another period of strong US profit growth is forecast for Corporate America, earnings are shaping up to be crucial for investors worried about how supply disruptions and inflation pressures will affect bottom lines.

That could lead to more volatility on Wall Street following a bruising September.

Analysts expect a 29.6 per cent year-on-year increase in profit for S&P 500 companies in the third quarter, according to IBES data from Refinitiv as of Friday.

The Dow Jones Industrial Average fell 250.19 points, or 0.72 per cent, to 34,496.06, the S&P 500 lost 30.15 points, or 0.69 per cent, to 4,361.19 and the Nasdaq Composite dropped 93.34 points, or 0.64 per cent, to 14,486.20.

The energy sector also ended lower after hitting its highest since January 2020 earlier in the day. Higher oil prices have fed into concerns about rising costs for businesses and consumers.

Analysts do expect some positive earnings news.

"If you're a larger company, you're able to mitigate a lot of these issues," said Christopher Harvey, head of equity strategy at Wells Fargo Securities in New York.

Visa was down 2.2 per cent and Mastercard also fell 2.2 per cent among the biggest drags on the S&P 500.

Volume on US exchanges was 8.15 billion shares, compared with the 10.9 billion average for the full session over the last 20 trading days.

Trading may have been slower due to the US federal holiday on Monday, with US bond markets shut for the day.

Among individual stocks, Southwest Airlines fell 4.2 per cent on a report it cancelled at least 30 per cent of its scheduled flights on Sunday.

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