NEW YORK — Wall Street tumbled Tuesday to its worst day in a month on worries about the strength of corporate profits and the economy following some mixed reports.
The S&P 500 fell 1.6% to break out of a weekslong lull. The Dow Jones Industrial Average dropped nearly 345 points, or 1%, while the Nasdaq composite sank 2%.
First Republic Bank had the biggest loss in the S&P 500 by far, and its stock plunged 49.4% after it said customers withdrew more than $100 billion during the first three months of the year. That doesn’t include $30 billion in deposits that big banks plugged in to build faith in their rival after the second- and third-largest U.S. bank failures in history shook confidence.
The size of the drop in deposits renewed worries about the U.S. banking system and the risk of an economy-sapping pullback in lending. That overshadowed First Republic’s beating analysts’ expectations for earnings.
The majority of companies so far this reporting season topped expectations, but the bar was set considerably low. Analysts forecast the worst drop in S&P 500 earnings since the spring of 2020, when the COVID-19 pandemic froze the global economy. Wall Street is focused just as much, if not more, on what companies say about future prospects as they do about the past three months.
UPS fell 10% after it met profit forecasts but made less in revenue than expected. It also said its revenue for the full year will likely come at the low end of its prior forecast.
Danaher fell 8.8% despite reporting better earnings and revenue than expected. Analysts pointed to its trimming back its forecast for a key revenue measure.
PepsiCo rose 2.3% after beating profit expectations. Homebuilder PulteGroup rose 1.7% after also topping forecasts.
Microsoft and Google’s parent company, Alphabet, both rose in afterhours trading after reporting profits above expectations.
All told, the S&P 500 fell 65.41 points to 4,071.63. The Dow dropped 344.57 to 33,530.83, and the Nasdaq fell 238.05 to 11,799.16.
The economy is under stress from high interest rates meant to get inflation under control.
A report Tuesday showed confidence among consumers fell more sharply in April than expected, down to its lowest level since July.
A separate report was more encouraging, saying sales of new homes rose by more than expected. The housing industry has been under pressure because higher mortgage rates are squeezing buyers.
In the bond market, the yield on the 10-year Treasury fell to 3.39% from 3.50% late Monday. The two-year yield, which moves more on expectations for Federal Reserve action, fell to 3.95% from 4.11%.
Stock indexes closed mostly lower in Europe and were mixed across Asia overnight.