Tesla (TSLA.O) shed 2.2%, steering a 1% drop in the S&P
500 consumer discretionary sector (.SPLRCD), after CEO Elon Musk said he would
be uncomfortable growing the automaker to be a leader in artificial
intelligence and robotics without having at least 25% voting control of the
company.
Apple (AAPL.O) fell 2.4% after offering rare discounts on
its iPhones in China on competition pressures, just days after it was overtaken
by Microsoft (MSFT.O) as the world's most valuable firm.
On the fourth-quarter earnings front, Goldman Sachs(GS.N)
reported a 51% rise in profit, as its traders capitalized on a nascent market
recovery and its asset and wealth business revenue rose. However, Morgan
Stanley's(MS.N) profit declined, while revenue surpassed expectations on a
rebound in dealmaking activity. Their shares were down 0.8% and 3.4%,
respectively.
"Morgan Stanley, Goldman Sachs tend to service the
wealthier high-net-worth clients, and have much less loan loss reserves,"
said Paul Nolte, senior wealth adviser and market strategist at Murphy &
Sylvest.
"Overall, I think the banks (results) came in pretty
good shape and the banking sector is pretty well-capitalized at this
point."
Wells Fargo (WFC.N), Bank of America (BAC.N), Citigroup
(C.N) and JPMorgan Chase (JPM.N) dropped between 1.6% and 2.7% after reporting
lower profits on Friday.
The broader banks index (.SPXBK) slid to an over one-month
low on Tuesday.
Wall Street finished the previous week higher as investors
continue to price in an around 70% chance of the Federal Reserve delivering a
25-basis-point rate cut in March - despite mixed inflation data and a lack of
supporting voices among policymakers for a quick start to monetary policy
easing.
UBS Global Research boosted its 2024 year-end target for the
S&P 500 (.SPX) on Tuesday to 5,150, representing a nearly 8% upside from
current levels.
Despite briefly surpassing its previous record closing high
last week, the benchmark index has faced resistance to breaching its highest
intra-day level, hit in January 2022.
Investors will parse Fed Board Governor Christopher Waller's
remarks during the day, after Atlanta Fed President Raphael Bostic warned about
cutting rates too soon.
At 9:48 a.m. ET, the Dow Jones Industrial Average (.DJI) was
down 226.52 points, or 0.60%, at 37,366.46, the S&P 500 (.SPX) was down
26.82 points, or 0.56%, at 4,757.01, and the Nasdaq Composite (.IXIC) was down
89.39 points, or 0.60%, at 14,883.37.
Dow-component Boeing (BA.N) declined 4.7%, as the Federal
Aviation Administration extended the grounding of its 737 MAX 9 airplanes
indefinitely and brokerage Wells Fargo downgraded the stock to "equal
weight" from "overweight".
Applied Digital(APLD.O) slumped 22.3% after the data-center
services provider posted downbeat second-quarter revenue.
Declining issues outnumbered advancers for a 4.43-to-1 ratio
on the NYSE and for a 3.17-to-1 ratio on the Nasdaq.
The S&P index recorded 16 new 52-week highs and one new
low, while the Nasdaq recorded 30 new highs and 77 new lows.