(Reuters) – US stock indices were reduced on Thursday when investors were waiting for more developments around trading, while Netflix posted a surprising decline in US subscribers and kicked in revenues for the FAANG group of shares with a sour note.
Traders works on the floor of the New York Stock Exchange in New York, USA July 2, 2015. REUTERS / Brendan McDermid
Stocks of streaming pioneer ( NFLX.O ) sank 11.3% and weighed on the S & P 500 and Nasdaq, when the company also missed targets for new subscribers abroad at a time when it has staked its future on global expansion.
Losses in Netflix also drove the .SPLRCL sector communications service, one of the most efficient S&P sectors so far this year, 1.20% lower.
"Netflix did nothing to reassure the investor's concerns about which earnings prospects will get out over the next few weeks," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
The disappointing earnings so far have intensified the pressure on markets from trade problems, he said.
The three most important Wall Street indices have dropped slightly from record highs this week as revenues in the second quarter were rolled in.
"With the race we've had on the market, conditions have been overbought and in that light the market has been right to release some of the pressure from the rally."
In trade-related news, US Finance Minister Steven Mnuchin said that US and Chinese officials will call later on Thursday which could pave the way for further in-person trading calls.
Investors are also expecting the Federal Reserve's policy meeting at the end of July, when expectations of interest rate cuts are very high.
At 10:00 ET, the Dow Jones Industrial Average .DJI is down 13.47 points, or 0.05%, of 27.206.38, S & P 500 .SPX was down 2.60 points, or 0.09 %, of 2,981.82. Nasdaq Composite .IXIC was down 16.07 points, or 0.20%, at 8,169.14.
International Business Machines Corp ( IBM.N ) reversed the premarket losses to rise 3% as quarterly profits on strong growth in its high-margin cloud business.
Gains in IBM, along with those in Apple Inc ( AAPL.O ), kept the technology sector .SPLRCT floating.
UnitedHealth Group Inc ( UNH.N ) dropped 1.5% after commenting that the insurance company would continue with its sales discounts, one week after the Trump administration withdrew an ambitious proposal to ban drugs refunds.
Railroad operator Union Pacific Corp ( UNP.N ) jumped 4.9% after reporting a profit, while tobacco company Philip Morris ( PM.N ) received 6.8 % on increasing its full-year result view.
Morgan Stanley ( MS.N ) rose after reporting a better than expected quarterly result.
Falling Problems Outreach for a 1.87-to-1 ratio on the NYSE and for a 1.45-to-1 ratio on the Nasdaq.
The S&P index recorded 10 new 52-week highs and four new declines, while Nasdaq recorded 16 new heights and 40 new precipitation.
Reporting of Medha Singh and Uday Sampath in Bengaluru; Editing by Arun Koyyur and Sriraj Kalluvila