After five consecutive days of gains, the market stepped back a bit today, especially on the eve of tech giants like Apple, Microsoft, Google and Amazon reporting. The fear today was that tech expectations are so high that even very good reports are liable to disappoint. Nothing short of spectacular was going to satisfy investors so, bracing for a letdown, there was a flight out of tech today. And as the July Fed meeting wraps up tomorrow, there is also anxiety about trimming the stimulus. So the market went into “risk-off” mode today as demonstrated by defensive sectors outperforming. Volume was a little above average at just under 10.4 billion. 

TUE  JULY 27, 2021  4:37 PM 

Wall St snaps five-day up streak as caution rises before tech earnings, Fed

By Caroline Valetkevitch

DJ: 35,144.31  +82.76        NAS: 14,840.71  +3.72         S&P: 4,422.30  +10.51     7/26

DJ: 35,058.52  -85.79         NAS: 14,660.58  -180.14      S&P: 4,401.46  -20.84      7/27

NEW YORK (Reuters) - U.S. stocks fell on Tuesday, ending a five-day winning streak in the three major indexes, as investors were cautious before results from top tech and internet names and Wednesday’s Federal Reserve announcement.  The Nasdaq led the day’s declines, registering its biggest daily percentage drop since May 12, but the three indexes pared losses heading into the close and ended well off the lows of the session.  Shares of Apple Inc, Microsoft Corp and Google parent Alphabet Inc, which all reported earnings after the bell, dropped and weighed the most on the Nasdaq and S&P 500 along with Amazon.com Inc, which is expected to report results later this week.

Also, electric-car maker Tesla Inc fell 2%, a day after it posted a bigger-than-expected second-quarter profit but said a global chip shortage that led to temporary factory shutdowns for the automaker remains serious.  Shares of the heavily weighted tech and internet companies have run up recently and last week regained leadership in the market, putting their results even more in the spotlight.  “Expectations are so high. They’re going to have good numbers ... but we are expecting much more or maybe they will talk down the second half of the year,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.  Adding to the cautious tone is the outlook for U.S.-listed Chinese stocks, he said. The shares including Baidu extended losses as fears over more regulations in the mainland persisted.  “There’s a fair amount of (U.S.) investors in those companies,” Nolte said.

Uncertainty also rose as the Fed began its two-day meeting, with investors looking for signs on when it intends to begin reining in its massive stimulus program.

The Dow Jones Industrial Average fell 85.79 points, or 0.24%, to 35,058.52, the S&P 500 lost 20.84 points, or 0.47%, to 4,401.46 and the Nasdaq Composite dropped 180.14 points, or 1.21%, to 14,660.58.  Helping to support the Dow, shares of McDonald’s Corp rose 1% ahead of its results due before the bell on Wednesday.  In another sign that investors were in a risk-off mood, defensive sectors such as real estate and utilities were the two best-performing S&P 500 categories for the day, and U.S. Treasuries prices rose.

Intel Corp shares dropped 2.1% after it said its factories would start building Qualcomm chips and laid out a road map to expand its new foundry business.

Volume on U.S. exchanges was 10.36 billion shares, compared with the 9.86 billion average for the full session over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 1.87-to-1 ratio; on Nasdaq, a 2.65-to-1 ratio favored decliners.  The S&P 500 posted 44 new 52-week highs and no new lows; the Nasdaq Composite recorded 39 new highs and 235 new lows.