Stocks dip as earnings pour in, consumer discretionary lags

S&P 500 companies largely exceed analysts' estimates for the third quarter so far

US stocks dipped in a choppy session after the latest round of earnings reports, as a decline in the consumer discretionary sector and interest-rate sensitive stocks outweighed gains in healthcare names.

The S&P 500 healthcare index rose 0.53 per cent to help keep the S&P 500 near the unchanged mark, buoyed by strong results and forecasts from Bristol-Myers, up 5.4 per cent and Celgene, up 6.4 per cent. The two drugmakers were the top boosts to the S&P 500.

Profits at S&P 500 companies have largely exceeded analysts' estimates for the third quarter so far, setting up the first profit growth since the second quarter of 2015. Thomson Reuters I/B/E/S data shows third-quarter earnings are now expected grow 2.6 per cent, up from the 0.5 per cent decline anticipated at the start of October.

Sectors linked to interest rates weighed, however, as yields on benchmark 10-year Treasury notes touched a five-month high of 1.87 per cent.

The S&P real estate sector was down 2.5 per cent, its worst decline in nearly six weeks, while utilities shed 0.5 per cent.

"If we can continue to see actual growth in revenue and growth in EPS, we may see this four-quarter drop in earnings growth come to an end. That would be really positive but we are too early in the earnings season to say that," said Peter Kenny, senior market strategist at Global Markets Advisory Group in New York.

"To the extent that the 10-year has popped, that is also providing a bit of a headwind for equities."

Comcast was among the top drags on the S&P 500 and Nasdaq, falling 1.7 per cent after Barclays and Deutsche Bank cut their price targets and cited increased competition from AT&T-owned DirecTV Now. The stock is down nearly 6 per cent over the past three sessions.

Comcast, along with O'Reilly Auto , whose quarterly earnings missed expectations, were the primary drags on the consumer discretionary index, which lost 0.9 per cent. O'Reilly shares touched a five-month low and were on pace for their worst day in over four years.

The Dow Jones industrial average fell 29.65 points, or 0.16 per cent, to 18,169.68, the S&P 500 lost 6.39 points, or 0.3 per cent, to 2,133.04 and the Nasdaq Composite dropped 34.29 points, or 0.65 per cent, to 5,215.97.

After the market close, Google parent Alphabet rose 2.3 per cent, while online retailer Amazon.com tumbled more than 6 per cent after their quarterly results.

Declining issues outnumbered advancing ones on the NYSE by a 2.61-to-1 ratio; on Nasdaq, a 1.99-to-1 ratio favoured decliners.

The S&P 500 posted 16 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 65 new highs and 120 new lows.

About 7.2 billion shares changed hands in U.S. exchanges, above the 6.35 billion daily average over the last 20 sessions.