April 2, 2019 / 7:39 PM / 2 months ago

US STOCKS-Wall St pauses after recent surge, Walgreens slides on profit warning

* U.S. core capital goods orders slip in February

* Walgreens biggest drag on main U.S. indexes

* Airline stocks take off on Delta's upbeat forecast

* Dow off 0.33%, S&P down 0.02%, Nasdaq up 0.20% (Updates to late afternoon, changes byline, adds NEW YORK dateline)

By April Joyner

NEW YORK, April 2 (Reuters) - U.S. stocks stalled on Tuesday as a decline in shares of Walgreens Boots Alliance Inc weighed on the S&P 500 and the Dow Jones Industrial Average and economic data did little to ease growth concerns.

Walgreens shares slumped 12.6% after the drugstore chain cut its 2019 profit growth forecast and reported a quarterly profit that missed analyst estimates.

The S&P 500 consumer staples index, which includes Walgreens, dropped 0.7%. Shares of rival drugstore company CVS Health Corp fell 3.8%. Shares of drug wholesalers AmerisourceBergen Corp, Cardinal Health Inc and McKesson Corp also slid.

Walgreens shares weighed heavily on all three of Wall Street's major indexes, while CVS and the drug wholesalers were among the biggest drags on the S&P 500.

The Nasdaq moved higher, however, as shares of Facebook Inc jumped 3.3%.

Data showing that new orders for key U.S.-made capital goods slipped in February and that shipments were flat did little to lift tepid investor sentiment.

Orders for non-defense capital goods excluding aircraft, or core capital goods orders, a closely watched proxy for business spending plans, fell 0.1%. Economists polled by Reuters had forecast it to remain unchanged.

The data comes on the heels of a survey showing a surprise rebound in China's manufacturing activity and better-than-expected U.S. numbers, which drove the S&P 500 to near six-month highs on Monday.

"We've gotten to a place and time where we are going to need new evidence to move this market higher," said Art Hogan, chief market strategist at National Securities in New York.

"Incrementally better-than-expected data might move this market higher, which was not the case in today's durable goods number."

The Dow Jones Industrial Average fell 85.81 points, or 0.33%, to 26,172.61, the S&P 500 lost 0.71 points, or 0.02%, to 2,866.48 and the Nasdaq Composite added 15.60 points, or 0.2%, to 7,844.51.

Despite coming under pressure, the S&P 500 is only 2.2% below a record closing high hit in late September as the Federal Reserve has paused interest-rate hikes and investors have grown optimistic about a resolution to the U.S.-China trade dispute.

Yet with the first-quarter corporate earnings reporting season about two weeks away, investors are bracing for what may be the first U.S. profit decline since 2016. Analysts expect quarterly earnings to fall 2%, according to Refinitiv data.

"There are reassuring signs that the global economy isn't tumbling into a recession," said Kate Warne, investment strategist at Edward Jones in St. Louis. "But it's not sufficient to have economic growth. We also need earnings growth."

Airline stocks got a lift from Delta Air Lines Inc's better-than-expected first-quarter profit forecast. Its shares jumped 6.6%, while the Dow Jones US Airlines index advanced 3.0%.

Dow Inc shares rose 5.5% in the company's stock market debut following its spinoff from DowDuPont Inc.

Declining issues outnumbered advancing ones on the NYSE by a 1.27-to-1 ratio; on Nasdaq, a 1.17-to-1 ratio favored decliners.

The S&P 500 posted 35 new 52-week highs and four new lows; the Nasdaq Composite recorded 46 new highs and 39 new lows. (Reporting by April Joyner; Additional reporting by Sruthi Shankar in Bengaluru and Amy Caren Daniel; Editing by Shounak Dasgupta and Andrea Ricci)

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