U.S. stocks were mostly lower Wednesday after results from tech behemoths Microsoft and Alphabet disappointed investors.
How are stock indexes trading
- The Dow Jones Industrial Average DJIA, +0.97% gained 50 points, or 0.2%, to about 31,926, according to Dow Jones Market Data.
- The S&P 500 SPX, +0.53% lost 23.8 points, or 0.6% to around 3,837
- The Nasdaq Composite COMP, +4.17% dropped 210 points, or 1.9% to about 10,983
On Tuesday, the Dow rose 337 points, or 1.1%, the S&P 500 rose 1.6% and the Nasdaq advanced 2.3%. The S&P 500 is up 7.6% so far in October, but remains down 19% for the year-to-date.
What’s driving markets
The S&P 500 and Nasdaq were on course to snap a three-day winning streak after poorly-received earnings reports from Microsoft MSFT, -5.58%, Google parent Alphabet GOOG, -6.57% and Texas Instruments TXN, -1.22% poured cold water on bulls’ newfound optimism. Share of all three were trading at least 5% lower.
The S&P 500 has jumped 4.6% since Thursday’s close as a generally positive third quarter earnings season, and hopes the Federal Reserve may be less aggressive in hiking rates after some weak economic data, sparked another burst of risk appetite.
“The latest data was good for inflation expectations, and good for recession fears, which both temper the Fed hawks a week before the Fed is preparing to announce another 75 basis point hike in its rates,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
Ian Williams, analyst at Peel Hunt, agreed. “Most of the earnings news released in the past 24 hours provided reassurance in the face of the economic downturn, and a pullback in yields also helped equity market sentiment yesterday,” he said.
Disappointing Alphabet and Microsoft numbers hit after the close Tuesday, alongside equally gloomy results from Texas Instrument.
“With its chips used across a variety of goods, the [T.I.] CEO’s comments about weakness in both personal electronics and industrial sectors is telling about demand in the broader economy,” said analysts at Deutsche Bank.
Attention will next turn to results from Meta META, -1.73%, due after the market close, and then Apple AAPL, -0.44% and Amazon.com AMZN, -1.90% on Thursday.
Helping to alleviated losses in the broader indices is the continued slide on Wednesday in bond yields TMUBMUSD10Y, 4.010% and the dollar DXY, -0.93%.
Read: U.S. dollar rally takes a breather as currency slumps versus major rivals
In U.S. economic data, the trade deficit in goods widened 5.7% in September to $92.2 billion as a strong dollar hindered exports.
Companies in focus
- Boeing Co. BA, -0.59% shares went up 0.5% Wednesday despite the aircraft maker reporting a widening third-quarter loss and revenue that missed analysts’ estimates by almost $2 billion amid what the company’s CEO described as a “challenging environment.”
- Visa Inc. V, +5.87% shares rose 2.6% Wednesday, after the company topped earnings expectations for its latest quarter Tuesday. Payments volume at grew 10% in the fiscal fourth quarter, while processed transactions increased 12%. Visa’s revenue rose to $7.79 billion from $6.56 billion and came in ahead of the FactSet consensus, which was for $7.55 billion.
- Chipotle Mexican Grill Inc. CMG, -2.90% shared slid 3.6% Wednesday after the restaurant chain on Tuesday reported continued growth, with third-quarter profit beating analysts’ expectations, though its price increases have caused lower-income customers to pull back.
- Skechers USA Inc. SKX, -3.73% shares dropped 7.3% after the maker of sneakers missed profit expectations for its latest quarter and delivered an outlook that came in below the consensus view.