U.S. stocks closed lower on Tuesday as one of the busiest days of the earnings season got under way, while oil prices slipped.
"Some of the earnings that have come out have been disappointing and you have oil [lower]," said Craig Sterling, head of U.S. equity research at Pioneer Investments. "The market is kind of aimless here today."
The Dow Jones industrial average closed about 50 points lower, with 3M contributing the most losses to the tune of nearly 33 points, offsetting a gain of approximately 20 points from Procter & Gamble. The S&P 500 dropped around 0.4 percent, with consumer discretionary falling 1.2 percent to lead decliners. The Nasdaq composite underperformed, falling about half a percent. Earlier, the three major indexes traded slightly higher.
"I think oil prices combined with the dollar" are pressuring stocks, said Kim Forrest, senior equity analyst at Fort Pitt Capital. "Our companies don't like that."
The U.S. dollar traded flat to lower against a basket of currencies, near 98.69, after breaking above 99 for the first time since February, according to FactSet. The euro traded near $1.089, while the traded around 104.2.
"The US dollar certainly has had a nice bid over the past three weeks as its clear the Fed is trying to getting away with another hike by yr end but as it will come in the context of a 1.5% US growth story," Peter Boockvar, chief market analyst at The Lindsey Group, said in a note.
"I argue that the FX discussion will shift from an interest rate differential one to where the growth is. Thus, I think the US dollar is just moving to the upper end of its multi year range rather than being on the cusp of a breakout," he said.
More than 90 companies were scheduled to post quarterly results on Tuesday. Dow components 3M, Caterpillar and DuPont reported earnings before the bell. Caterpillar and 3M posted mixed results, as both beat estimates on the bottom line, while missing on revenues. Caterpillar also lowered its 2016 earnings per share guidance.
"On balance, earnings have been better, but we've also had an upward trend in energy prices; that's flattened out a bit," said Art Hogan, chief market strategist at Wunderlich Securities. "You need something to offset Under Armour being down." Under Armour shares fell more than 10 percent despite posting better-than-expected results.
U.S. crude for December delivery fell 56 cents, or 1.11 percent, to settle at $49.96 per barrel ahead of weekly inventory data and as verbal squabbles among between OPEC members created uncertainty about a potential output cut.
"The picture is incredibly muddy and this is dragging the price of oil lower. Also if you look at the long term curve supply curve, Mexico and Brazil are both in vigorous war to attract interest from companies to drill in their deep water oil reserve," said Naeem Aslam, chief market strategist at Think Markets.
Tech giant Apple is scheduled to report quarterly results Tuesday after the bell.
"Earnings have been pretty good. I guess it's a question of waiting for the [Federal Reserve] as we face some technical resistance," said Peter Cardillo, chief market economist at First Standard Financial.
Fort Pitt Capital's Forrest said the biggest question mark surrounding earnings remains in the consumer discretionary sector. "I think those who are doing well are going to do better, and those not doing well will be doing worse," she said.
Stocks have held in a very narrow range recently, as the S&P 500 has around 1 percent over the past three months. "The SPX is making headway toward its 50-day moving average, a breakout above which would likely be seen as a positive technical catalyst that is reflective of improved short-term momentum," said Katie Stockton, chief technical strategist at BTIG, in a note.
"There is room for upside follow-through per our overbought/oversold measures, which showed widespread oversold conditions last week among the constituents of the SPX," she said.
S&P 500 3-month chart
The Fed is scheduled to hold its next monetary policy meeting next week, and it's largely expected to keep interest rates unchanged. Atlanta Fed President Dennis Lockhart spoke on Tuesday, but did not comment on monetary policy as the central bank entered its self-imposed quiet period.
"The more likely time for the Fed to move would be in December," said Ernie Cecilia, CIO at Bryn Mawr Trust. "As long as the data comes strong."
In economic news, consumer confidence hit 98.6, with economists polled by Reuters expecting confidence to hit 101.5. Meanwhile, U.S. home prices rose slightly in August from July, with the S&P CoreLogic Case-Shiller 20-City Composite index gaining 5.1 percent year over year.
U.S. Treasurys were mixed, with the two-year note yield near 0.85 percent and the benchmark 10-year yield around 1.76 percent.
Overseas, European stocks fell, with the pan-European Stoxx 600 index falling 0.35 percent. In Asia, stocks closed mixed, with the Nikkei 225 gaining 0.76 percent and the Korean Kospi falling 0.52 percent.
The Dow Jones industrial average fell 53.76 points, or 0.3 percent, to close at 18,169.27, with Home Depot leading decliners and Procter & Gamble the top advancer.
The slipped 8.17 points, or 0.38 percent, to end at 2,143.16, with consumer discretionary leading nine sectors lower and utilities and consumer staples the only advancers.
The Nasdaq dropped 26.43 points, or 0.5 percent, to 5,283.4.
About nine stocks declined for every five advancers at the New York Stock Exchange, with an exchange volume of 530 million and a composite volume of 2.757 billion in afternoon trade.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded higher, near 13.5, snapping a five-day losing streak.
Gold futures for December delivery rose $9.90 to settle at $1,273.60 per ounce.
On tap this week:
ATB: Apple, AT&T, Chipotle Mexican Grill, Capital One, Discover Financial, Express Scripts, Juniper Networks, Vertex Pharma, iRobot, Pandora Media, Panera Bread, Owens-Illinois
BTB: Biogen, Boeing, Coca-Cola, Comcast, GlaxoSmithKline, Mondelez International, Nintendo, Simon Property Group, Boston Scientific, Canon, General Dynamics, Hess, Nasdaq OMX, Norfolk Southern, Northrop Grumman, Southwest Air, State Street, Syndham Worldwide, Alliance Bernstein, Garmin, Generac, GrubHub, Owens Corning, Six Flags
ATB: Samsung Electronics, Tesla Motors, Texas Instruments, F5 Networks, Arch Capital, Murphy Oil, Newmont Mining, NXP Semiconductor, Public Storage, Suncor, VMWare, Western Digital, Whiting Petroleum, Buffalo Wild Wings, Cheesecake Factory, Extra Space Storage, Groupon, Rent-a-Center, Shutterfly, Raymond James
8:30 a.m.: U.S. trade deficit
9:45 a.m.: Markit services PMI
10 a.m.: New home sales
1 p.m.: $34 billion five-year Treasury note auction
BTB: Barclays, Bristol-Myers Squibb, Celgene, Colgate-Palmolive, ConocoPhillips, Deutsche Bank, Dow Chemical, Ford, UPS, Volkswagen, Aetna, Alexion Pharma, Autoliv, Blackstone, Borg Warner, CBRE Group, CME Group, Dr. Pepper Snapple, Gannett, International Paper, Invesco, L-3 Communications, Marathon Petroleum, National Oilwell Varco, Nokia, Nomura Holdings, Potash, Praxair, Raytheon, Sirius XM Radio, Stanley Black & Decker, T. Rowe Price, Thermo Fisher, Brunswick, Cabela's, Cliffs Natural Resources, GNC Holdings, Lazard, Old Dominion Freight Line, Pinnacle Foods, Sealed Air
ATB: Alphabet, Amazon.com, Baidu, Amgen, Deckers Outdoor, Aflac, Digital Realty Trust, Cirrus Logic, Columbia Sportswear, Cypress Semiconductor, Eldorado Gold, Flex, Fortinet, Federated Investors, VeriSign, Yamana Gold
8:30 a.m.: Jobless claims
8:30 a.m.: Durable goods
10 a.m.: Pending home sales
10 a.m.: Housing vacancies
11 a.m.: Kansas City Fed Survey
1 p.m.: $28 billion seven-year Treasury note auction
Earnings: Chevron, Exxon Mobil, A-B InBev, MasterCard, AbbVie, UBS, Ambev, BNP Paribas, Sanofi, AutoNation, Cabot Oil & Gas, Hershey, Phillips 66, Shire, Weyerhaeuser, Xerox, Apollo Global Management, Bloomin' Brands, CBOE Holdings, Legg Mason, Oaktree Capital, Tenneco
8:30 a.m.: Q3 GDP, advance
8:30 a.m.: Employment cost index
10 a.m.: Consumer sentiment
*All times Eastern. Planner subject to change.