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Wall Street closed lower following a choppy session on Wednesday. While the potentially dovish Fed continued to dominate investor participation in the market, disappointing earnings numbers coming in from the tech sector acted as a dampener. Two of the three major indexes ended in negative territory, while one ended marginally in the green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.01% or 2.37 points to close at 31,839.11 points. Twenty-two components of the 30-stock index ended in the green, while eight ended in the red.
The S&P 500 lost 0.7% or 28.51 points to finish at 3,830.6 points. Six of the 11 broad sectors of the benchmark index closed in the green. The Energy Select Sector SPDR (XLE), the Health Care Select Sector SPDR (XLV) and the Materials Select Sector SPDR (XLB) advanced 1.4%, 1.1% and 0.7%, respectively, while the Communication Services Select Sector SPDR (XLC) declined 3.2%.
The tech-heavy Nasdaq slid 2% or 228.12 points to end at 10,970.99 points, dragged down by tech stocks.
The fear-gauge CBOE Volatility Index (VIX) decreased 4.2% to 27.28. A total of 12.3 billion shares were traded on Wednesday, higher than the last 20-session average of 11.6 billion. Advancers outnumbered decliners on the NYSE by a 1.71-to-1 ratio. On Nasdaq, a 1.41-to-1 ratio favored advancing issues.
Nasdaq Leads Session’s Losses
While the Dow managed to keep its head above the water and marginally finished in the green for a fourth straight session, the S&P 500 and the Nasdaq weighed down heavily on the market. Nasdaq bore the maximum brunt and slid more than 2% on disappointing earnings numbers coming in from mega-cap tech giants, Microsoft Corporation (MSFT - Free Report) and Alphabet Inc. (GOOGL - Free Report) .
Microsoft reported its first-quarter fiscal 2023 results on Wednesday. Its net income in the quarter was $17.6 billion, down 14% year over year. The company reported earnings of $2.35 per share, beating the Zacks Consensus Estimate earnings of $2.29. The tech firm noted that its Windows OEM business revenues, including its Windows operating system, decreased 15%, with continued deterioration in the PC market. Microsoft’s shares fell 7.7% on the report.
Alphabet announced earnings of $1.06 per share in third-quarter 2022, widely missing the Zacks Consensus Estimate of $1.25. It reported a net profit of $13.9 billion, down 27% from a year earlier, while revenues climbed 6% to $69.1 billion. Alphabet’s shares plunged 9.1% on the report. This is the third straight quarter of disappointing earnings from the tech behemoth.
The news triggered a sell-off in the market, threatening to wipe out more than $400 billion from some of the largest U.S. companies, with investors pondering whether this year’s $5.5 trillion tech rout has reached its bottom. Nasdaq, being a tech-dominated index, suffered the most from the fallout of the market sentiment and snapped a three-day winning streak. Even as the mood continued to revolve around positive signals coming in from the Fed, the tech stocks slumped. The Technology Select Sector SPDR (XLK) slid 2.2%.
New home sales came in at 603,000 for September, higher than the consensus of 600,000 for the period but significantly less than the downwardly revised number of 677,000 for August. Mortgage rates have hit their highest level in more than two decades, and the Fed’s policies have proven to act as a deterrent in the sector. The report reinforces the belief that the Fed is now starting to see its stringent measures taking effect and would now take stock, lest it pushes the economy into a slowdown.
Economic Data
According to a government report, for the week ending Oct 21, 2022, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 2.6 million barrels from the previous week. At 439.9 million barrels, U.S. crude oil inventories are about 2% below the five-year average for this time of year.
Fortune Brands Home & Security, Inc. reported third-quarter 2022 earnings before charges/gains of $1.79 per share, which surpassed the Zacks Consensus Estimate of $1.70 by 5.3%. (Read More)
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Stock Market News for Oct 27, 2022
Wall Street closed lower following a choppy session on Wednesday. While the potentially dovish Fed continued to dominate investor participation in the market, disappointing earnings numbers coming in from the tech sector acted as a dampener. Two of the three major indexes ended in negative territory, while one ended marginally in the green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.01% or 2.37 points to close at 31,839.11 points. Twenty-two components of the 30-stock index ended in the green, while eight ended in the red.
The S&P 500 lost 0.7% or 28.51 points to finish at 3,830.6 points. Six of the 11 broad sectors of the benchmark index closed in the green. The Energy Select Sector SPDR (XLE), the Health Care Select Sector SPDR (XLV) and the Materials Select Sector SPDR (XLB) advanced 1.4%, 1.1% and 0.7%, respectively, while the Communication Services Select Sector SPDR (XLC) declined 3.2%.
The tech-heavy Nasdaq slid 2% or 228.12 points to end at 10,970.99 points, dragged down by tech stocks.
The fear-gauge CBOE Volatility Index (VIX) decreased 4.2% to 27.28. A total of 12.3 billion shares were traded on Wednesday, higher than the last 20-session average of 11.6 billion. Advancers outnumbered decliners on the NYSE by a 1.71-to-1 ratio. On Nasdaq, a 1.41-to-1 ratio favored advancing issues.
Nasdaq Leads Session’s Losses
While the Dow managed to keep its head above the water and marginally finished in the green for a fourth straight session, the S&P 500 and the Nasdaq weighed down heavily on the market. Nasdaq bore the maximum brunt and slid more than 2% on disappointing earnings numbers coming in from mega-cap tech giants, Microsoft Corporation (MSFT - Free Report) and Alphabet Inc. (GOOGL - Free Report) .
Microsoft reported its first-quarter fiscal 2023 results on Wednesday. Its net income in the quarter was $17.6 billion, down 14% year over year. The company reported earnings of $2.35 per share, beating the Zacks Consensus Estimate earnings of $2.29. The tech firm noted that its Windows OEM business revenues, including its Windows operating system, decreased 15%, with continued deterioration in the PC market. Microsoft’s shares fell 7.7% on the report.
Alphabet announced earnings of $1.06 per share in third-quarter 2022, widely missing the Zacks Consensus Estimate of $1.25. It reported a net profit of $13.9 billion, down 27% from a year earlier, while revenues climbed 6% to $69.1 billion. Alphabet’s shares plunged 9.1% on the report. This is the third straight quarter of disappointing earnings from the tech behemoth.
The news triggered a sell-off in the market, threatening to wipe out more than $400 billion from some of the largest U.S. companies, with investors pondering whether this year’s $5.5 trillion tech rout has reached its bottom. Nasdaq, being a tech-dominated index, suffered the most from the fallout of the market sentiment and snapped a three-day winning streak. Even as the mood continued to revolve around positive signals coming in from the Fed, the tech stocks slumped. The Technology Select Sector SPDR (XLK) slid 2.2%.
Shares of Amazon.com, Inc. (AMZN - Free Report) and NVIDIA Corporation (NVDA - Free Report) dropped 4.1% and 2.8%, respectively. Both carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
New Home Sales Plunge in September
New home sales came in at 603,000 for September, higher than the consensus of 600,000 for the period but significantly less than the downwardly revised number of 677,000 for August. Mortgage rates have hit their highest level in more than two decades, and the Fed’s policies have proven to act as a deterrent in the sector. The report reinforces the belief that the Fed is now starting to see its stringent measures taking effect and would now take stock, lest it pushes the economy into a slowdown.
Economic Data
According to a government report, for the week ending Oct 21, 2022, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 2.6 million barrels from the previous week. At 439.9 million barrels, U.S. crude oil inventories are about 2% below the five-year average for this time of year.
Stocks That Have Made Headline
IDEX Stock Gains on Q3 Earnings Beat, Ups '22 EPS View
IDEX Corporation (IEX - Free Report) reported impressive third-quarter 2022 results. (Read More)
Fortune Brands Beats on Q3 Earnings, Lowers '22 Outlook
Fortune Brands Home & Security, Inc. reported third-quarter 2022 earnings before charges/gains of $1.79 per share, which surpassed the Zacks Consensus Estimate of $1.70 by 5.3%. (Read More)