Traders work on the floor of the New York Stock Exchange (NYSE) during morning trading on January 26, 2023 in New York City.
Michael M. Santiago | Getty Images
U.S. stocks slid Wednesday as investors returned focus to the latest batch of corporate earnings. Wall Street also continued to weigh the outlook for future Federal Reserve policy moves.
The Dow Jones Industrial Average fell by 113 points, or 0.3%. The S&P 500 slid 0.9%, while the Nasdaq Composite dropped 1.5%.
Chipotle slid more than 4% after missing expectations on the top and bottom lines in its latest results. Lumen Technologies tumbled 21.1% after it reported a fourth-quarter loss of $3.1 billion and gave guidance for the year that was under Wall Street expectations. Google parent Alphabet tumbled nearly 8% amid concerns of rising competition in the artificial intelligence space.
Meanwhile, CVS and Uber gained more than 2% and 6%, respectively, following earnings that came in above Wall Street estimates.
For the first quarter of 2023, 42 companies in the S&P 500 have issued negative earnings guidance, according to Refinitiv. Meanwhile, eight have issued positive guidance, while many others have not changed their guidance or issued any to begin with. That’s a higher share of companies with negative expectations than the historical average, Refinitiv reported.
Around 69% of the 297 S&P 500 companies that have reported fourth-quarter earnings so far beat analyst expectations, Refinitiv said, though many analysts lowered their expectations for the quarter amid rising concerns about the health of the economy. Just over 27% missed analyst expectations for the quarter.
Investors are looking to post-bell earnings from companies including Walt Disney and Mattel to gauge if there are any signs of slowing consumer spending or a weakening in the economy.
Stocks closed near session highs after a volatile bout of trading on Tuesday, driven mainly by Fed Chair Jerome Powell’s remarks that inflation has started easing. His comments reiterated those given at his press conference last week, further bolstering investor hopes that the central bank will soon pause or pivot on interest rate hikes.
“It’s the continued kind of yin-and-yang, if you will, with, ‘Which way are we going with the Fed?,'” said Sal Bruno, CIO of IndexIQ. “We should expect a lot of choppiness.”
