Wall Street indices ended mixed on Wednesday as disappointing earning reports from tech companies weighed on stocks.
The S&P 500 sank 0.7% after losing an initial gain, while the Nasdaq composite slid 2%. The lower finish snapped both indexes’ three-day winning run.
The Dow Jones Industrial Average finished narrowly in the green after rising 1.1%, owing in part to a strong performance by Visa.
Smaller firm stocks outperformed the market as a whole, raising the Russell 2000 index by 0.5%.
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The S&P 500 dropped 28.51 points to 3,830.60. The Nasdaq index dropped 228.12 points to 10,970.99. The Dow finished up 2.37 points at 31,839.11. It temporarily led by more than 335 points. The Russell 2000 increased by 8.18 points to 1,804.33.
Google’s parent company, Alphabet, slumped 9.6% after it reported disappointing third-quarter financial results as advertising sales weakened. Weak ad sales are threatening other tech and communications companies. Music streaming service Spotify fell 13% after it reported a bigger third-quarter loss than Wall Street expected.
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Microsoft slid 7.7% after it reported disappointing growth for its cloud computing company, while profits fell along with PC sales. Chipmaker Texas Instruments fell 2.6% after giving investors a discouraging forecast for the current quarter.
Facebook’s parent company, Meta, fell 10.8% in after-hours trading following the release of its third-quarter earnings, which fell short of analysts’ forecasts, according to FactSet. The stock fell 5.6% in regular trading.
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Stocks with huge valuations, such as Microsoft, Meta Platforms and Google parent Alphabet, can have a big effect on market indexes. In the S&P 500, the slide in technology and communications stocks outweighed gains elsewhere in the benchmark index, including in healthcare and energy companies.
Traders bid up shares in companies that delivered improved quarterly results Wednesday.
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Visa rose 4.6% after reporting strong financial results and raising its dividend. Norfolk Southern gained 2.9% after reporting a surge in profits on an increase in shipping rates.
Outside of earnings, Mobileye Global, Intel’s self-driving unit, rose 38% in its market debut.
Several other big companies are on deck to report earnings this week. Apple and Amazon report result on Thursday, along with industrial bellwether Caterpillar and McDonald’s.
The tech-stock losses also overshadowed another slide in Treasury yields, which helped boost stocks earlier in the week as they pulled back from their multiyear highs.
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Bond yields have been declining amid speculation among investors that the Federal Reserve may begin easing up on its aggressive pace of interest rate increases as soon as this year. Gains in those rates have sent mortgage rates sharply higher this year.
The yield on the 10-year Treasury fell to 4.01% from 4.10% late Tuesday. The two-year yield fell to 4.42% from 4.48%.
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The government will release its first estimate on the third-quarter gross domestic product on Thursday. The U.S. economy is already slowing down and actually contracted during the first half of the year. On Friday the government will also release more data on personal income, consumption and spending.