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Disappointing Earnings News Contributing To Sell-Off On Wall Street

wallstreet aug27 25jan23 lt

Stocks have moved sharply lower in morning trading on Wednesday, with the major averages all showing significant moves to the downside after ending the previous session mixed. The tech-heavy Nasdaq has helped lead the way lower.

In recent trading, the major averages have fallen to new lows for the session. While the Nasdaq is down 238.08 points or 2.1 percent at 11,096.19, the S&P 500 is down 58.25 points or 1.5 percent at 3,958.70 and the Dow is down 364.44 points or 1.1 percent at 33,369.52.

The sell-off on Wall Street largely reflects a negative reaction to earnings news from some big-name companies.

Shares of Microsoft (MSFT) are tumbling by 3.4 percent after the software giant reported its fiscal second quarter results after the close of trading on Tuesday.

Microsoft reported second quarter earnings that exceeded analyst estimates but provided disappointing revenue guidance for the current quarter.

Aerospace giant Boeing (BA) has also slumped by 2.7 percent after reporting an unexpected fourth quarter loss on weaker than expected revenues.

On the other hand, shares of AT&T (T) have spiked by 5.7 after the telecom giant reported better than expected fourth quarter earnings.

Traders may also be moving out of stocks and into safer havens ahead of the release of some key economic data in the coming days.

Traders are likely to keep a close eye on reports on durable goods orders, fourth quarter GDP, and personal income and spending.

Reflecting the negative reaction to Microsoft's guidance, software stocks have moved sharply lower, dragging the Dow Jones U.S. Software Index down by 2.9 percent.

Significant weakness is also visible among networking stocks, as reflected by the 2.3 percent slump by the NYSE Arca Networking Index.

Semiconductor and computer hardware stocks are also seeing considerable weakness, contributing to the steep drop by the tech-heavy Nasdaq.

Outside the tech sector, retail, transportation and natural gas stocks have also shown notable moves to the downside on the day.

In overseas trading, stock markets across the Asia-Pacific ended mixed on Wednesday, with several markets still closed for the Lunar New Year. Japan's Nikkei 225 Index rose by 0.4 percent, while Australia's S&P/ASX 200 Index fell by 0.3 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.'s FTSE 100 Index has slid by 0.5 percent, the German DAX Index and the French CAC 40 Index are both down by 0.4 percent.

In the bond market, treasuries are extending the notable rebound seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.6 basis points at 3.443 percent.

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