U.S. stock indexes finished mostly lower Thursday as disappointing earnings reports from several industrial sector companies weighed on the market, offsetting strong results from Facebook, Microsoft and others.
3M, which makes Post-it notes and many other products, plunged 12.9% in heavy trading after announcing weak results and a restructuring program. It was the biggest loss for the company since the market crash of October 1987.
The loss for 3M pulled the Dow Jones Industrial Average into the red. The S&P 500 finished slightly lower, holding close to the record high it set on Tuesday.
Facebook and Microsoft both rose after reporting strong earnings. That helped the Nasdaq eke out a small gain.
The indexes' mixed finish gave the benchmark S&P 500 index its second modest loss in as many days. The market remains on track for solid gains this month.
Traders have grown more optimistic that most companies will continue to deliver strong growth this year, despite some signs that point to a slowing global economy.
"Earnings are flowing, and we're going to see a positive earnings season," said Karyn Cavanaugh, senior markets strategist, Voya Investment Management. If (the market) keeps going up, up, up, then that kind of makes you a little skeptical. The fact that investors are being a little bit more selective, that's a good sign."
The S&P 500 slipped 1.08 points, or less than 0.1%, to 2,926.17. The Dow Jones Industrial average lost 134.97 points, or 0.5%, to 26,462.08. Without the loss from 3M, the Dow would have been 58 points higher.
The Nasdaq composite rose 16.67 points, or 0.2%, to 8,118.68.
Small-company stocks fared worse than the rest of the market. The Russell 2000 index gave up 12.52 points, or 0.8%, to 1,575.61.
Major European indexes finished lower.
Bond prices fell. The yield on the 10 year Treasury note rose to 2.53% from 2.52% late Wednesday.
Earnings reporting season is more than a third of the way in, and investors are searching for clues about whether profit growth can accelerate later this year following a weak first quarter. The stock market has had a furious rally this year, largely because the Federal Reserve has said that it is halting its plan to raise interest rates, at least temporarily.
Industrial stocks were on the losing side Thursday after 3M reported lower revenue and profit for the first three months of the year than Wall Street expected. It also slashed its profit forecast for the full year.
United Parcel Service said its net income fell 17% on nearly flat revenue, and Illinois Tool Works had weaker revenue than analysts forecast. Rockwell Automation said that automotive related sales were less than it expected last quarter.
UPS lost 8.1%, Illinois Tool Works fell 3.6% and Rockwell Automation sank 6.7% following their earnings reports.
Raytheon, a defence contractor that is also in the industrial sector, dropped 4.4%. It reported stronger profit for the latest quarter than expected, but analysts noted some mixed results for its profit margins.
All told, the companies helped drag industrial stocks down 2%, the steepest loss by far among the 11 sectors that make up the S&P 500.
Altria Group slid 6% after the nation's largest cigarette maker reported weak first quarter results on lower sales and a hefty investment in cannabis company Cronos.
Other companies turned in quarterly report cards that blew past expectations.
Facebook surged 5.8% after the social media giant reported a 26% jump in quarterly revenue. That helped lift the communications sector by 1.1%.
Microsoft gained 3.3% after the software maker said its quarterly revenue vaulted 14% from a year earlier. Amazon reported that its profit more than doubled in the first quarter, the latest sign that the e-commerce company's push into advertising and cloud computing paid off. Amazon reported its results after the close of regular trading.
Coming into this earnings reporting season, Wall Street was expecting a dud. Partially because of slowing economic growth around the world, analysts were forecasting the first drop in earnings for the S&P 500 in nearly three years.
Companies, though, have been surprising analysts with not-as-bad results. So far, about 190 of the companies in the S&P 500 have reported their earnings for the first three months of the year. Among them, earnings actually grew 2.1% from a year earlier.
All the better-than-expected results mean analysts are now forecasting a drop of 2.8% in earnings for S&P 500 companies this reporting season. That's not as bad as the 4% decline they were expecting a few weeks ago.
Energy futures finished mixed. Benchmark U.S. crude fell 1% to settle at $65.21 per barrel. Brent crude dropped 0.3% to close at $74.35 per barrel.
Wholesale gasoline inched 0.2% higher to $2.13 per gallon. Heating oil was little changed at $2.10 per gallon. Natural gas gained 2.1% to $2.51 per 1,000 cubic feet.
Gold was little changed at $1,279.70 per ounce, silver inched 0.2% lower to $14.88 per ounce and copper slid 1.7% to $2.86 per pound.
The dollar fell to 111.62 Japanese yen from 112.35 yen late Wednesday. The euro weakened to $1.1128 from $1.1143.
AP Business Writer Stan Choe contributed to this report.