U.S. equities closed lower on Tuesday after weaker-than-expected earnings from Goldman Sachs (NYSE:GS) and continued geopolitical jitters weighed on sentiment.
The flight-to-safety trade continued on Wall Street, as investors mulled over geopolitical tensions in North Korea, Syria and Russia while UK Prime Minister Theresa May surprised the markets after she announced her decision 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.
Meanwhile corporate earnings failed to offset the flight-to-safety trade, as shares of Goldman Sachs sank more than 5%, after the investment bank reported first-quarter earnings that missed on the top and bottom lines.
Goldman Sachs 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.
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.
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.
The Dow Jones Industrial Average closed 0.55% lower at 20,523, the S&P 500 dipped 0.29%, and the Nasdaq Composite traded 0.12% lower at 5,849.
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