Nasdaq closes slightly lower for second day as earnings season continues

The Nasdaq closed lower on Wednesday for a second day as investors studied the latest batch of corporate earnings and assessed the situation of the biggest companies amid rising rates and growing fears of a recession.

The tech-heavy index fell 0.18% to close at 11,313.36, while the S&P 500 fell 0.02% to 4,016.22. The Dow Jones Industrial Average made a small gain, rising 9.88 points, or 0.03%, to end at 33,743.84.

Stocks pared losses during afternoon trading as the Dow rebounded from a drop of more than 460 points. At its lows, the Nasdaq lost 2.34%.

Tech stocks languished for most of the session after Microsoft’s lackluster outlook further stoked growth concerns. The software giant closed slightly lower. Boeing ended slightly higher despite a failure in terms of turnover and result.

“If the company is bearish on its own future, why should investors be bullish? That’s pretty much the message we’re getting from earnings season so far,” said Adam Sarhan, CEO of 50 Park Investments.

Investors bought stocks heading into the review period, anticipating better-than-expected drawdowns as companies reset and lowered expectations. But reports so far across all sectors have mostly dashed those hopes, as many companies share a bleak outlook, he said.

Investors brace for bigger earnings this week as fears of a recession persist, with You’re here and IBM among companies expected to release numbers after the bell. Through Wednesday’s open, more than 19% of S&P 500 companies reported fourth-quarter results, with 68% posting stronger-than-expected results, according to FactSet.

This beat rate, however, lags historical trends, according to Nick Raich, CEO of The Earnings Scout. The average fourth-quarter earnings beat rate is 79%, he pointed out in a Friday note.

As of Wednesday’s close, all three major averages are higher for the week, with the Nasdaq up 1.55%. The S&P and the Dow gained 1.1% each.

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