Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., October 23, 2023. Portal/Brendan McDermid/File Photo Acquire License Rights
- Alphabet’s cloud division misses revenue estimates
- Microsoft gains as Azure drives first-quarter results
- Meta returns are due after market close
- Indices: S&P down 1.06%, Nasdaq down 1.83%, Dow flat
Oct 25 (Portal) – The tech-heavy Nasdaq and S&P 500 fell on Wednesday as Alphabet slumped after its cloud unit missed revenue estimates, while other mega-cap stocks also came under pressure from rising U.S. Treasury yields .
Google parent Alphabet (GOOGL.O) slipped 9.1% to a three-month low as its cloud business posted its slowest growth in at least 11 quarters.
The communications services sector (.SPLRCL) fell 5.2%, on track to post its worst daily decline in a year and near a one-month low.
Microsoft (MSFT.O), on the other hand, rose 2.7% to a three-month high after the company beat expectations for first-quarter results across all segments, including its cloud business.
“Generative AI was supposed to increase Google’s cloud revenue, and that clearly hasn’t happened. Rising Treasury yields and mixed earnings are prompting equity investors to hit the sell button,” said Edward Moya, senior market analyst at OANDA.
Other mega-caps including Apple (AAPL.O) and Amazon.com (AMZN.O) fell 1% and 4.8%, respectively, as Treasury yields rose after data showed new home sales rose accelerated in September, confirming expectations of continued high interest rates in 2024.
Focus will be on Meta Platform (META.O) results after the market close, with the company expected to report its best quarterly revenue growth in nearly two years. The company’s shares fell 2.6% due to the overall decline in the technology sector.
Among the other major S&P 500 sectors, Consumer Discretionary (.SPLRCD) and Real Estate (.SPLRCR) were hit the hardest, while Utilities (.SPLRCU) was the biggest gainer.
The Dow Jones Transport Average Index (.DJT) fell to a more than four-month low after trucking company Old Dominion Freight Line (ODFL.O) suffered a 5.6% decline following quarterly results.
Defense giant General Dynamics (GD.N) rose 3.6% after reporting a jump in third-quarter sales.
According to LSEG data, 80% of the 146 S&P 500 companies that have reported so far have beaten analysts’ earnings expectations. Quarterly earnings are expected to rise 2.6% year over year.
Israel has agreed to postpone an expected invasion of Gaza so the United States can bring missile defense systems to the region to protect U.S. troops there, the Wall Street Journal reported Wednesday, citing U.S. and Israeli officials.
As of 12:10 p.m. ET, the Dow Jones Industrial Average (.DJI) rose 0.54 points to 33,141.92, the S&P 500 (.SPX) fell 45.00 points, or 1.06%, to 4,202.68 and the Nasdaq Composite (.IXIC) fell 240.12 points, or 1.83%, to 12,899.76.
For the rest of the week, investors will also keep an eye on third-quarter gross domestic product, durable goods and personal consumption spending data.
Federal Reserve officials were under a media shutdown ahead of their Nov. 1 interest rate decision.
Among other stocks, Texas Instruments (TXN.O) fell 3.6% after the analog chip maker forecast fourth-quarter sales and profit below estimates.
CoStar Group (CSGP.O) fell 6% after the real estate information provider cut its full-year sales forecast.
Declining issues outnumbered advancers, a ratio of 2.85-to-1 on the NYSE and a ratio of 2.33-to-1 on the Nasdaq.
The S&P index recorded no new 52-week highs and 58 new lows, while the Nasdaq recorded 14 new highs and 373 new lows.
Reporting by Ankika Biswas and Shashwat Chauhan in Bengaluru; Edited by Savio D’Souza and Shounak Dasgupta
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