Stocks regain their footing a day after big tech sell-off
By DAMIAN J. TROISE and ALEX VEIGA
AP Business Writers
NEW YORK (AP) — Technology companies led stocks modestly higher on Wall Street in afternoon trading Wednesday, as the market clawed back some of its losses from a big sell-off a day earlier.
The rally, which was losing steam into the final hour of trading, came after a wobbly start for stocks, the latest turbulence for the market as traders brace for more earnings reports from major U.S. companies this week.
The S&P 500 was up 0.4% as of 3:13 p.m. Eastern after easing back from a 1.6% gain. The Nasdaq rose 0.2% after having been up 1.7% earlier in the afternoon. The Dow Jones Industrial Average was up 186 points, or 0.5%, to 33,417.
It has been a volatile week for major indexes, which rallied to a strong finish late Monday only to slump on Tuesday.
Technology stocks have been the key driver through most of the week’s ups and downs. Many of the companies in the sector have pricey stock values that tend to push the market up or down with more force.
Big Tech companies had some of the biggest gains on Wednesday. Software giant Microsoft rose 5.5% after reporting strong profits for its most recent quarter. Payments processing giant Visa jumped 6.6% after reporting a surge in profits fueled by a large jump in spending on the company’s namesake credit and debit card network.
Big communications companies are also reporting their latest results. Alphabet, Google’s parent company, fell 4%, after posting its slowest quarterly revenue growth since 2020.
Facebook parent, Meta Platforms, is on deck to report its results later Wednesday. Social media company Twitter and iPhone maker Apple will report their results on Thursday.
Investors were also focused on earnings from industrial companies and various retailers. Boeing slumped 9.3% after it reported a loss that was far worse than Wall Street expected. Chipotle rose 2.5% after reporting solid financial results.
Internet retail giant Amazon will report its results on Thursday.
The latest round of earnings comes amid lingering concerns about rising inflation and plans from central banks to raise interest rates in order to temper the impact of higher costs on businesses and consumers. Investors are closely watching to see how companies have fared amid supply chain problems and higher costs while assessing how consumers are dealing with higher prices for everything from food to clothing and gas.
“Everyone is dealing with this sort of whack-a-mole of risks that seems to be getting bigger as days and months go by,” said Katie Nixon, chief investment officer for Northern Trust Wealth Management.
The U.S. Federal Reserve is set to aggressively hike rates as it steps up its fight against inflation. The chair of the Fed has indicated the central bank may hike short-term interest rates by double the usual amount at upcoming meetings, starting next week. It has already raised its key overnight rate once, the first such increase since 2018.
Bond yields have generally been rising throughout the year as investors prepare for higher rates. The yield on the 10-year Treasury rose to 2.82% from 2.77% late Tuesday.
Wall Street remains focused on inflation’s path forward amid lingering threats from Russia’s war against Ukraine and the virus pandemic.
“We just keep moving more areas of uncertainty onto the pile of uncertainties,” Nixon said.
Natural gas prices surged as much as 24% over the last day in Europe and the euro weakened after Russia said it would cut off supplies to Poland and Bulgaria. Natural gas and oil prices had already been rising as the pandemic eased and demand increased, but the Russian invasion of Ukraine has added to price increases. Crude oil and and natural gas prices have jumped so far in 2022 and that has made gasoline and heating more expensive for consumers.
Strict lockdown measures in China have also added to concerns about slowing economic growth because of damage to the world’s second-largest economy. The flow of industrial goods has been disrupted by the suspension of access to Shanghai, home of the world’s busiest port, and other industrial cities including Changchun and Jilin in northeast China.
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Veiga reported from Los Angeles.
