Mixed earnings from U.S tech giants

Mixed earnings from U.S tech giants: NEW YORK, April 27 (Reuters) – A mixed bag of earnings from some of Wall Street’s biggest companies may muddy the outlook for investors hoping to “buy the dip” amid a vicious stock market selloff.

With a massive week of corporate results underway, Google parent Alphabet Inc (GOOGL.O) reported first-quarter revenue below expectations on Tuesday, while software giant Microsoft Corp (MSFT.O) forecast double-digit revenue growth for its next fiscal year. 

Mixed earnings from U.S Largest tech companies by market cap

Investors have focused on results from some of Wall Street’s biggest names this week, hoping they could provide a counterweight to the deluge of news that has battered stocks in recent days, highlighted by concerns over an increasingly hawkish Federal Reserve to worries over geopolitical turbulence stemming from Russia’s invasion of Ukraine. 

Though most of the earnings season lies ahead, some investors worry that anything less than stellar results from corporate behemoths will do little to stem a slide in stocks that left the S&P 500 down 12.4% on the year after Tuesday’s 2.8% drop. The Nasdaq on Tuesday hit its lowest closing level since December 2020 as it lost nearly 4%, bringing it 22% below the all-time high it hit less than six months ago, on Nov. 19. 

Top Companies in the Technology sector in the United States by Market Cap

April 26 (Reuters) – Wall Street ended sharply lower on Tuesday, with the Nasdaq closing at its lowest since December 2020 as investors worried about slowing global growth and a more aggressive Federal Reserve.

Tesla (TSLA.O) slumped 12% after investors worried that chief executive Elon Musk might sell some of his stake in the electric car maker to help pay for his $44 billion deal to buy Twitter, announced on Monday. 

Tesla contributed more than any other stock to the S&P 500 and Nasdaq’s steep declines.

It was the steepest one-day drop for the Nasdaq since September 2020. The tech-heavy index has now fallen 22% from its record high close last November.

Previously-prized growth stocks have been hammered in recent weeks as investors fret about the impact of higher interest rates on their future earnings.

China’s COVID-19-led lockdown and an aggressive pivot by major central banks to fight inflation have overshadowed what has been a better-than-expected quarterly earnings season so far.

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Alphabet Inc (GOOGL.O) and Microsoft Corp (MSFT.O) both dropped almost 4% ahead of their results after the closing bell. About a third of the S&P 500 companies are set to report results this week.

Alphabet fell another 6.5% in extended trade after its quarterly report disappointed investors. 

Apple (AAPL.O), Wall Street’s most valuable company, fell 3.7% in Tuesday’s session ahead of its report on Thursday.

“Earnings broadly have been pretty good. But it hasn’t mattered very much to the overall stock story. It’s mainly about the Fed and other central banks, and now China and COVID,” said Ross Mayfield, an investment strategist at Baird in Louisville, Kentucky.

“I think with where the market is right now, in this indiscriminate selling and fear phase, I think you’ve got more potential for downside risk than you have for an upside surprise,” Mayfield said.

The S&P 500 consumer discretionary (.SPLRCD) index lost 4.99% and was among the worst of 11 sector indexes, pulled lower by Tesla, and also by a 4.6% decline in Amazon (AMZN.O).

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., on March 30, 2022. REUTERS/Brendan McDermid/File Photo

The S&P 500 energy index (.SPNY) was the only sector to rise, ending up 0.05% as oil prices rebounded following reports that Russian gas supplies to Poland would be halted Wednesday, a development viewed as an escalation of tensions between Russia and the West over Ukraine. 

The Dow Jones Industrial Average (.DJI) fell 2.38% to end at 33,240.18 points, while the S&P 500 (.SPX) lost 2.81% to 4,175.2.

The Nasdaq Composite (.IXIC) dropped 3.95% to 12,490.74.

Mixed earnings from U.S Investing in Tech Stocks

S&P 500’s busiest trades

Of the 134 companies in the S&P 500 that reported earnings so far, 80.6% topped analysts’ profit expectations, according to Refinitiv data. In a typical quarter, 66% beat estimates.

General Electric Co (GE.N) tumbled more than 10% after forecasting full-year earnings at the low end of its previous estimate. 

United Parcel Service Inc (UPS.N) fell 3.5% despite reporting a rise in quarterly adjusted profit, while U.S. hospital operator Universal Health Services Inc (UHS.N) slumped nearly 9% after its earnings missed estimates. 

Meanwhile, data showed U.S. consumer confidence edged lower in April, though households planned to buy automobiles and many appliances, which should help underpin consumer spending in the second quarter. 

Volume on U.S. exchanges was 12.3 billion shares, compared with a 12.6 billion average over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 4.71-to-1 ratio; on Nasdaq, a 4.82-to-1 ratio favored decliners.

The S&P 500 posted no new 52-week highs and 45 new lows; the Nasdaq Composite recorded 24 new highs and 646 new lows.

(This story refiles to correct the fourth paragraph to show it was the Nasdaq’s biggest one-day drop since September 2020, not September 2008)

US tech giants aren’t monopolies, they are engaged in fiercely competitive markets

Investors have focused on results from some of Wall Street’s biggest names this week, hoping they could provide a counterweight to the deluge of news that has battered stocks in recent days, highlighted by concerns over an increasingly hawkish Federal Reserve to worries over geopolitical turbulence stemming from Russia’s invasion of Ukraine. 

Though most of the earnings season lies ahead, some investors worry that anything less than stellar results from corporate behemoths will do little to stem a slide in stocks that left the S&P 500 down 12.4% on the year after Tuesday’s 2.8% drop. The Nasdaq on Tuesday hit its lowest closing level since December 2020 as it lost nearly 4%, bringing it 22% below the all-time high it hit less than six months ago, on Nov. 19. 

S&P 500 futures pared earlier gains on Wednesday morning and were recently up around 0.3%.

“There’s a lot of anxiety ahead of the earnings … because if they don’t hold up, then there’s nothing left to hold up the market,” said Thomas Hayes, chairman at Great Hill Capital in New York.

Mixed earnings from U.S

Despite the mixed results from big growth names, earnings in the broad S&P 500 have topped analyst expectations. Overall, about 81% of companies have exceeded earnings expectations, with first-quarter profits now expected to have climbed 8.2% from the year-ago period, up from an estimated 6.4% at the start of April, according to Refinitiv data as of Tuesday morning.

Yet there have been some high-profile disappointments, including growth-stock poster child Netflix (NFLX.O), whose shares were pummeled after its results.

“Expectations for growth (companies) are very, very high, and you don’t meet expectations and you are going to see the Netflix or the Google drops,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago. “It’s not industry-specific, it’s more company-specific.”

Microsoft’s shares were up about 3.5% in pre-market trading on Wednesday, while Alphabet’s were off about 4.6%.

In another setback for growth stocks, Tesla’s (TSLA.O) shares tumbled 12% on Tuesday after the electric carmaker’s CEO, Elon Musk, clinched his deal to buy Twitter (TWTR.N) for $44 billion.

But on the upbeat side, shares of Visa (V.N) rose in after-hours trade on Tuesday after the payments company said it expects revenue to accelerate past pre-pandemic levels. 

Markets could get fresh jolts this week as other results flow in, including from Apple (AAPL.O)and Amazon.com (AMZN.O). Facebook owner Meta Platforms is scheduled to report after the close on Wednesday (FB.O).

With only a few days left in the month, the S&P 500 is down 7.8% for April so far, which would be its biggest monthly percentage drop since March 2020.

Even so, there may be some reason for optimism in April’s final days. According to Bespoke Investment Group, in 39 prior months since 1980 when the S&P 500 was down at least 5% with three trading days left, the S&P averaged a gain of 1.51% in the final three trading days of these months.

“Usually, the final three trading days of these bad months offer up some relief for investors,” Bespoke said in a note.

 

 

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