Everyone took a bit of a beating today with the Dow ending just barely positive after several wild swings in the 120 point range, helped only by the fact that DuPont had a very good day due to the announcement of its embattled CEO stepping down.  But neither the S&P nor Nasdaq fared as well.  After the best 5-day run in four years, investors today decided to brace for what they expect to be a terrible Q3, in fact the worst quarter in six years.  And all this without even the first company reporting in as yet.  The prophecy is becoming self-fulfilling and was helped along by today's 2.3% decline in the S&P health index and 3.7 % decline in the Nasdaq biotech sector, all the result of the coming scrutiny over the 1,000+% recent surge in some drug prices.

(I can tell you that one drug I used to take cost just $7 for a 30-day supply one year ago and had been priced at that level for the last 30 years; today it's $450 for same!  That's a 64-fold increase, 800%.  I believe in 1789 that the French stormed the Bastille over similar issues.)  Everyone's digging in their heels, I guess the bright spot being that they've been predicting this all year, they've been quite wrong so far, they're almost certainly wrong again.  But the above average volume of 7.6 billion means that there's not a lot of confidence out there for a good Q3.  And that's exactly the kind of environment where smart money can do very well.


Markets | Tue Oct 6, 2015 5:12pm EDT

Wall Street dips as third-quarter earnings season kicks off

BY NOEL RANDEWICH

DJ:  16,790.19  +13.76       NAS:  4,748.36  -32.90        S&P:  1,979.92  -7.13

(Reuters)  U.S. stocks fell on Tuesday, ending a five-day winning streak, as investors focused on upcoming quarterly reports that are expected to reflect a dip in corporate earnings.

A surge in DuPont's (DD.N) stock helped keep the Dow Jones industrial average in positive territory but the S&P 500 and Nasdaq lost ground, with a sharp drop in biotech stocks.

The S&P health index .SPXHC lost 2.33 percent, the worst performer among the ten major S&P sectors. The sector has been under intense scrutiny over high drug prices.

The Nasdaq biotechnology index .NBI ended down 3.77 percent, recovering from deeper losses of around 6.6 percent.

The S&P 500 index had gained 5.6 percent over the previous five sessions, its best 5-day run since 2011, after a weak U.S. jobs report hinted at economic weakness but also lowered expectations the Federal Reserve will raise interest rates this year.

The International Monetary Fund cut its global growth forecasts for a second time this year, citing weak commodity prices and a slowdown in China.

Underscoring concerns about the world economy, S&P 500 companies are expected to report a 4.2-percent fall in earnings in upcoming third-quarter reports, the biggest decline in six years, according to Thomson Reuters data.

"It's been a while since we've gone into earnings season with the bar set so low, and that typically works to the advantage of stocks," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.

Stock reactions to quarterly results over the next few weeks may provide signs of whether the equity market has hit rock bottom after over a month of global financial turbulence, Carlson said.

The Dow Jones industrial average .DJI edged up 0.08 percent to end at 16,790.19 points.

The S&P 500 .SPX lost 0.36 percent to 1,979.92 and the Nasdaq Composite .IXIC dropped 0.69 percent to finish the day at 4,748.36.

Seven of the ten major S&P sectors ended lower. The energy index .SPNY was up 2.23 percent, leading the advancers, after crude oil prices jumped.

DuPont rose 7.67 percent after CEO Ellen Kullman said she would step down.

Pfizer (PFE.N) and Merck (MRK.N) were down 2.06 percent and 2.79 percent, respectively, both the biggest drags on the S&P health index.

Pepsi (PEP.N) rose 1.31 percent after it reported better-than-expected quarterly results and raised its forecast for the year.

After the bell, shares of Yum! Brands (YUM.N) dropped 16 percent. The restaurant operator reported third-quarter results, including trouble in its key China operation, that disappointed investors.

Advancing issues outnumbered decliners on the NYSE by 1,675 to 1,357. On the Nasdaq, 1,554 issues fell and 1,233 advanced.

The S&P 500 index showed six new 52-week highs and one new low, while the Nasdaqrecorded 34 new highs and 44 lows.

About 7.6 billion shares changed hands on U.S. exchanges, just above the 7.4 billion average for the previous 20 sessions, according to Thomson Reuters data.