S&P 500, Nasdaq slip on weak earnings forecasts, inflation data focus

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(Updates prices throughout, adds quote in paragraph 4, adds NEW YORK dateline)

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S&P 500, Nasdaq slip on weak earnings forecasts, inflation data focus Back to video

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Skyworks, Paypal drop on downbeat forecasts

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Novovax surges on layoff plans

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Indexes: Dow flat, S&P 500 down 0.2%, Nasdaq down 0.4%

By Shreyashi Sanyal, Shristi Achar A and Caroline Valetkevitch

NEW YORK, May 9 (Reuters) –

Major U.S. stock indexes were mostly lower on Tuesday afternoon as investors grew more cautious ahead of the U.S. consumer price index report, while disappointing forecasts from companies such as PayPal and Apple supplier Skyworks weighed on the mood.

Shares of PayPal Holdings dropped 11.8%% and pressured the benchmark S&P 500 after the company cut its margin forecast. The stock was also among the top drags on the Nasdaq.

Skyworks Solutions Inc shares slid 6% after the company forecast current-quarter revenue and earnings below estimates.

“Companies have generally been beating earnings expectations, but earnings season is always choppy, and today we have some weaker results. That’s weighing a bit on the market,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.

Talks over the U.S. debt ceiling were adding to caution in the market, he said.

Shares of other Apple suppliers including Qualcomm, Broadcom, Qorvo and Corning were also lower. The Philadelphia SE Semiconductor Index was down 1.8%.

Investors are anxiously awaiting the Labor Department’s consumer price index (CPI) report on Wednesday, and will look for clues on whether inflation is continuing to ease.

Market participants have been trying to gauge how much longer the Federal Reserve will need to raise interest rates to bring down inflation.

Reports on producer prices, weekly jobless claims and consumer sentiment are also lined up for the week.

Credit conditions for U.S. businesses and households continued tightening in the first months of the year, according to a Fed survey, marking the accumulating impact of Fed monetary tightening.

Investors were also waiting for an update on plans for the debt ceiling from a meeting between U.S. President Joe Biden, Republican House Speaker Kevin McCarthy and other congressional leaders at the White House later in the day.

Worries of a potential government default loom over Washington as early as June 1, if Congress does not act to resolve the deadlock.

The Dow Jones Industrial Average rose 4.94 points, or 0.01%, to 33,623.63, the S&P 500 lost 9.1 points, or 0.22%, to 4,129.02 and the Nasdaq Composite dropped 51.65 points, or 0.42%, to 12,205.27.

Boeing Co rose 1.7% after budget carrier Ryanair Holdings Plc placed a multi-billion dollar order for Boeing jets.

Novavax surged 28.7% as the drugmaker plans a 25% cut to its global workforce.

Under Armour Inc lost 6.4% as the sports apparel maker saw its annual sales and profit below street expectations.

Dialysis services provider

DaVita Inc

jumped 13.9% on a rise in its annual profit forecast as demand for procedures pickup in the U.S.

Declining issues outnumbered advancing ones on the NYSE by a 1.34-to-1 ratio; on Nasdaq, a 1.29-to-1 ratio favored decliners.

The S&P 500 posted 13 new 52-week highs and 13 new lows; the Nasdaq Composite recorded 65 new highs and 142 new lows. e

(Reporting by Shreyashi Sanyal and Shristi Achar A in Bengaluru and additional reporting by Caroline Valetkevitch in New York; Editing by Sonia Cheema, Anil D’Silva and Deepa Babington)