By Shivani Kumaresan and Medha Singh
(Reuters) - The S&P 500 and the Dow slipped for a second straight day on Tuesday, with investors pinning their hopes on results from Netflix (NASDAQ:NFLX) and other major tech-related companies this week to help sustain an upbeat start to the earnings season.
Video-streaming service provider Netflix, which thrived during last year's lockdowns, will be the first to report quarterly numbers in the so called FAANG group. Its shares rose 1.3% in early trading, ahead of its results after the closing bell.
The broader NYSE FANG+TM index added about 0.05%.
International Business Machines (NYSE:IBM) Corp rose 3.9% after recording the biggest rise in quarterly sales in more than two years, boosted by its bets on cloud computing.
Chipmaker Intel Corp (NASDAQ:INTC) is slated to report results on Thursday.
"We are getting a little bit of weakness ... even though the earnings and economic data is good," said Ryan Detrick, senior market strategist at LPL Financial (NASDAQ:LPLA) in Charlotte, North Carolina.
"The underlying fundamentals are extremely strong and it wouldn't be overly concerning after the rally we have seen in the past 13 months for the market to catch its breath a little bit more in the face of strong earnings."
After blockbuster earnings from major U.S. banks last week, analysts expect first-quarter profit for overall S&P 500 firms to jump 30.9% from a year earlier, according to Refinitiv IBES data.
Richly valued technology stocks are back in demand as a pullback in longer-dated bond yields from 14-month highs has eased worries over higher borrowing costs.
Seven of the 11 major S&P sectors were lower. The healthcare index hit an all-time high while technology, utilities and real estate traded higher.
At 09:58 a.m. ET the Dow Jones Industrial Average fell 111.30 points, or 0.33%, to 33,966.33, the S&P 500 lost 6.10 points, or 0.15%, to 4,157.16 and the Nasdaq Composite gained 2.77 points, or 0.02%, to 13,917.54.
The S&P 500 and the Dow hit record highs last week, boosted by a string of robust economic data and expectations of a strong corporate earnings season.
Kansas City Southern (NYSE:KSU) jumped about 15% after Canadian National offered to buy the U.S. railroad operator for about $30 billion, trumping a rival bid by Canadian Pacific (NYSE:CP).
The surge in Kansas City shares helped drive a 1.8% gain in the Dow Jones Transports index.
Tobacco company Altria Group (NYSE:MO) tumbled about 7% after the Wall Street Journal reported that the Biden administration is considering a rule that would limit nicotine or ban menthol in cigarettes.
Johnson & Johnson (NYSE:JNJ) rose 1.2% after the drugmaker beat expectations for quarterly earnings and raised its dividend.
Nike Inc (NYSE:NKE) dropped about 2.5% after Citigroup (NYSE:C) lowered its rating on the company's shares to "neutral" from "buy".
Declining issues outnumbered advancers by a 1.7-to-1 ratio on the NYSE and on the Nasdaq.
The S&P 500 posted 45 new 52-week highs and no new lows while the Nasdaq recorded 40 new highs and 39 new lows.