- AT&T wins from new subscribers
- General Dynamics slips after weak outlook
- Tesla, IBM post results
- Indices: Dow up 0.03%, S&P 500 down 0.02%, Nasdaq down 0.18%
NEW YORK, Jan 25 (Portal) – The S&P 500 closed nominally lower on Wednesday as a string of corporate earnings ranged from bearish to gloomy and renewed concerns about the economic impact of the US Federal Reserve’s tightening policy.
All three major US stock indices pared losses during the afternoon session, finishing well behind session lows, with the blue-chip Dow posting a small gain in the final few minutes.
The tech-heavy Nasdaq was weighed down after Microsoft Corp (MSFT.O), the first major tech company to report quarterly results, issued a gloomy forecast and raised red flags on its megacap peers, which have yet to report.
“We’ve had days of ups and downs, indicating an ongoing tug of war,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. “The good news of the murky guidance is working from the standpoint of what the Fed is doing.”
“This result has become the catalyst for the market in one way or another,” added Carlson. “Earnings matter, but what really gets the market in focus is the Fed’s interest rate/inflation story.”
The fourth quarter earnings season has entered into overdrive after 95 of the companies in the S&P 500 reported. Of those, 67% beat consensus estimates, according to Refintiv, which is well below the average beat rate of 76% over the past four quarters.
Analysts are now expecting overall S&P 500 gains to fall 3.0% year over year, nearly double the 1.6% decline on Jan. 1, according to Refinitiv.
The Dow Jones Industrial Average (.DJI) was up 9.88 points, or 0.03%, to 33,743.84, the S&P 500 (.SPX) was down 0.73 points, or 0.02%, to 4,016.22 and the Nasdaq Composite (.IXIC) fell 20.92 points, or 0.18%, to 11,313.36.
Five of the S&P 500’s 11 major sectors ended lower, with utilities (.SPLRCU) suffering the largest percentage loss.
Abbott Laboratories (ABT.N) fell 1.4% as weaker-than-expected medical equipment sales weighed on the stock.
Among gainers, News Corp (NWSA.O) rose 5.7% after Rupert Murdoch withdrew a proposal to reunite News Corp and Fox Corp.
AT&T Inc (TN) also provided disappointing guidance, but its renewed focus on its telecom business helped boost subscriber numbers, sending its shares up 6.6%.
General Dynamics Corp (GD.N) beat expectations for the quarter, but a weak 2023 forecast helped the defense company’s shares fall 3.6%.
Tesla Inc (TSLA.O) shares tumbled in extended trading after the electric carmaker beat fourth-quarter sales estimates.
IBM (IBM.N) advanced after hours after posting the highest annual revenue growth in a decade.
Shares of Levi Strauss & Co rose more than 6% in extended trading after the denim maker issued an upbeat forecast for 2023.
Finally, the New York Stock Exchange (NYSE), in an addendum to Tuesday’s technical error that halted opening auctions for a flurry of stocks and prompted a review by the United States Securities and Exchange Commission (SEC), said a manual error had occurred in the snafu, which caused widespread confusion at the opening bell.
Rising issues predominated on the NYSE at a 1.25 to 1 ratio; on the Nasdaq, a 1.13 to 1 ratio favored movers.
The S&P 500 posted 8 new 52-week highs and 1 new low; the Nasdaq Composite posted 61 new highs and 30 new lows.
Volume on US exchanges was 10.89 billion shares, compared to the average of 10.78 billion over the past 20 trading days.
Reporting by Stephen Culp; Additional reporting by Shreyashi Sanyal and Johann M Cherian in Bengaluru; Editing by Aurora Ellis
Our standards: The Trust Principles.