Investing.com – U.S. equities traded lower on Tuesday, led by a sharp drop in the share price of Goldman Sachs, after the bank posted weaker than expected earnings while geopolitical jitters continued to weigh on sentiment.
Shares of Goldman Sachs Group Inc (NYSE:GS) sank more than 5% on Tuesday, after the investment bank reported first-quarter earnings that missed on the top and bottom lines.
The Wall Street bank posted earnings-per-share (EPS) of $5.15 on $8.026 billion of revenue against analysts’ expectations of EPS of $5.31 on $8.446 billion of revenue. This was the first time in 15 months that Goldman failed to beat earnings expectations.
Meanwhile, rival Bank of America reported strong first quarter earnings results, beating on both top line and bottom line estimates.
Goldman’s drop to nearly five month lows, coupled with rising geopolitical tensions weighed on the three main U.S. indexes not least the dow, which sank triple digits.
Elsewhere, the upcoming first round of French Presidential elections added to the risk-off sentiment, as left-wing candidate Jean-Luc Lemenchon’s late surge in polls fuelled uncertainty as to the outcome of the first round of French Presidential elections.
Meanwhile, investors were taken aback, after UK Prime Minister Theresa May announced plans to call an early election.
Although UK opinion polls suggested PM Theresa May would significantly increase her parliamentary majority of 17 during the election, the decision to call a snap election, after she said that the next general election would be held as scheduled in 2020, represents an element of risk.
On the economic data front, investors mulled over a slowdown in U.S. home building, after the Commerce Department said Tuesday, Housing starts declined 6.8% to a seasonally adjusted annual rate of 1.22 million units.
The Dow Jones Industrial Average traded 0.59% lower at 20,515. The S&P 500 dipped 0.31% and the Nasdaq Composite traded 0.23% lower at 5843.29.