US Markets

Stocks slide after some disappointing earnings from McDonald's, Travelers

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Strategas' Chris Verrone explains the emerging signs of global cyclicality

Stocks closed lower Tuesday as investors pored through a slew of key earnings from companies such as McDonald's, Travelers, Procter & Gamble and United Technologies.

The Dow Jones Industrial Average fell 39.54 points to 26,788.10, or 0.15%,  after rising more than 100 points earlier in the day. The S&P 500 slid nearly 0.4% to 2,995.99 while the Nasdaq Composite dipped 0.7% to finish the day at 8,104.30.

The major indexes hit turned lower in afternoon trading after U.K. lawmakers rejected a limited time frame to review a deal on Brexit. This makes an Oct. 31 deadline extension more likely.

Traders work on the floor of the New York Stock Exchange (NYSE) on August 23, 2019 in New York City.
Eduardo Munoz Alvarez | Getty Images

McDonald's shares dropped 5% earnings and revenue for the previous quarter that missed analyst expectations. The company's U.S. same-store sales, a key metric for franchises, grew by 4.8%. That's below a StreetAccount estimate of 5.1%.

Travelers plunged more than 8% after reporting earnings that badly missed estimates.

United Technologies shares rose 2.2% after the company posted earnings that topped analyst expectations. Better-than-expected revenues from the company's Otis, Pratt & Whitney and Collins Aerospace divisions helped drive the beat.

Procter & Gamble climbed 2.6% after its results topped expectations. The company's numbers were driven by Procter's beauty, health care and fabric and home care lines.

Through Tuesday morning, more than 19% of S&P 500 companies have reported quarterly numbers. Of those companies, nearly 80% have beaten analyst earnings expectations.

"This earnings season is by no means spectacular, but it's not as bad as we feared," said Ryan Detrick, senior market strategist at LPL Financial. "The economy is, fortunately, not falling into a recession. It's slowing, but the earnings are not compounding that."

"It seems like we're in slow motion before we break out to all-time highs," he said.

Investors also kept an eye on global trade after China's vice foreign minister said that Beijing and Washington had achieved some progress in their trade talks.

His comments come less than 24 hours after President Donald Trump sounded optimistic about the prospect of a trade agreement by the middle of next month.

Despite Tuesday's losses, the S&P 500 remained within 1% of its all-time high.

"I don't think it's a bold statement to expect the SPX to reach its prior high but there's ample risk of the market getting 'faked out' with a misstep in earnings," Andrew Thrasher, founder of Thrasher Analytics, wrote in a note.

In other news, Biogen surged more than 26% after the drugmaker announced it will seek regulatory approval for its Alzheimer's treatment. The stock and lifted the broader biotechnology space. The iShares Nasdaq Biotechnology ETF (IBB) closed 1.7% higher.

—CNBC's Sam Meredith contributed to this report.