NEW YORK (AP) -- Disappointingly weak earnings reports from 3M and other industrial companies kept U.S. stock indexes in check on Thursday, blotting out a set of blowout results from big-name tech companies.
3M, the maker of Scotch tape and various products for businesses, reported weaker revenue and profit than Wall Street expected for the first three months of the year. It also slashed its profit forecast for the full year, while United Parcel Service said its net income fell 17% on nearly flat revenue.
They helped drag industrial stocks to the largest loss among the 11 sectors that make up the S&P 500, and 3M's loss dealt a particularly sharp blow to the Dow Jones Industrial Average.
The Nasdaq held up better than the other indexes following strong earnings reports from Microsoft and Facebook.
Tech companies have been leading the way this year, as the S&P 500 index returned to a record this week, on expectations that they can continue to deliver strong growth despite a slowing global economy. And many are delivering: Revenue jumped 14% for Microsoft and 26% for Facebook from a year ago.
Earnings reporting season is about a third of the way in, and investors are searching for clues about whether profit growth can accelerate later this year following a weak first quarter. The stock market has had a furious rally this year, largely because the Federal Reserve has said that it is halting its plan to raise interest rates, at least temporarily.
KEEPING SCORE: The S&P 500 was down 0.4% as of 10:15 a.m. Eastern time.
The Dow Jones Industrial average was down 247 points, or 0.9%, at 26,348, and the Nasdaq composite slipped 0.2%.
EARNINGS WOES: 3M plunged 9.7%, and UPS lost 7.2% following their earnings reports.
They helped to drag industrial stocks in the S&P 500 down by 1.7%.
EARNINGS WINS: Facebook surged 6.5% following its earnings report, and it helped communications-services companies in the S&P 500 jump 1.3% for the biggest gain among the 11 sectors that make up the index.
Microsoft rose 4%, and technology companies in the S&P 500 rose 0.5%.
THE POWER OF LOW EXPECTATIONS: Coming into this earnings reporting season, Wall Street was expecting a dud. Partially because of slowing economic growth around the world, analysts were forecasting the first drop in earnings for the S&P 500 in nearly three years.
Companies, though, have been surprising analysts with not-as-bad results. So far, about 190 of the companies in the S&P 500 have reported their earnings for the first three months of the year. Among them, earnings actually grew 2.1% from a year earlier.
All the better-than-expected results mean analysts are now forecasting a drop of 2.8% in earnings for S&P 500 companies this reporting season. That's not as bad as the 4% decline they were expecting a few weeks ago.
MARKETS ABROAD: European stocks struggled following news that two potential mergers won't be going ahead. In the U.K., regulators blocked Sainsbury's 7.3 billion-pound ($9.4 billion) purchase of Walmart's Asda unit amid concerns the deal would have increased prices and reduced the quality and range of products available.
And in Germany, Deutsche Bank and Commerzbank said they were halting talks on a possible merger that aimed to create a stronger global banking player, saying it would be too risky and costly.
Germany's DAX slipped 0.2%, Britain's FTSE 100 lost 0.6% and France's CAC 40 index fell 0.4%.
In China, the Shanghai market dropped 2.4% amid signs the country's central bank plans to avoid major stimulus moves amid signs the economy is stabilizing.
State media reported that the People's Bank of China's latest injection of liquidity showed the use of target support rather than what the Xinhua News Agency described as a "scattergun approach."
In Japan, the Nikkei 225 rose 0.5%, and South Korea's Kospi lost 0.5%.