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TOKYO (AP) — Asian shares dipped Wednesday after Wall Street took a step back from its big rally as markets tried to digest a slew of earnings.
Japan's benchmark Nikkei 225 dove 1.8% in morning trading to 32,871.85. Australia's S&P/ASX 200 fell 0.8% to 7,390.30. South Korea's Kospi slid 1.1% to 2,636.62. Hong Kong's Hang Seng dipped 1.5% to 19,713.43, while the Shanghai Composite lost 0.5% to 3,273.90.
On Wall Street, the S&P 500 lost 12.23, or 0.3%, to 4,576.73, coming off its fifth straight winning month. The Nasdaq composite sank 62.11, or 0.4%, to 14,283.91. The Dow Jones Industrial Average squeezed out a gain of 71.15 points, or 0.2%, to 35,630.68 even though most of the stocks within it weakened.
Travel-related stocks helped drag the market lower after they gave up some of their big gains from earlier in the year. Norwegian Cruise Line lost 12.1% despite reporting stronger profit and revenue for the spring than expected. Expectations have been high for it and rivals after its stock soared 80% for the year through Monday.
JetBlue Airways sank 8.3% to roughly halve its nearly 20% gain for the year through July, despite reporting better profit than expected for the latest quarter. It cut its forecast for results for the full year, partly because of the cancellation of a partnership with American Airlines
Worries have been broadly rising that expectations have built too high for the entire U.S. stock market after the S&P 500 surged more than 19% so far this year. Stocks had leaped to a 16-month high on hopes inflation is cooling enough to get the Federal Reserve to stop hiking interest rates. That in turn could allow the economy to avoid a long-expected recession.
While inflation has indeed come down since the summer and the economy has remained remarkably resilient, critics say it’s no guarantee inflation will continue to cool at the same rate. They say stock prices have risen too far, too quickly.
Among other stocks that struggled with high expectations Tuesday was Molson Coors Beverage. It fell 4.7% after reporting weaker revenue for the spring than expected, even though its profit topped expectations.
Most companies so far this reporting season have beaten forecasts, but that’s usually the case. And expectations were low coming into this season, with analysts calling for the worst decline in S&P 500 earnings per share in three years.
Among the winners on Wall Street Tuesday was Caterpillar. It rose 8.9% after blowing past analysts’ forecasts for earnings during the spring. It was the stock pushing up the most on the Dow, where Caterpillar can have more of an impact than on the S&P 500 because of its big stock price.