The Nasdaq closed lower for a second day on Wednesday as investors studied the latest corporate earnings and assessed how the largest companies are faring amid rising interest rates and mounting recession fears.
The tech-heavy index was down 0.18% to close at 11,313.36, while the S&P 500 was down 0.02% to settle at 4,016.22. The Dow Jones Industrial Average posted a small gain, rising 9.88 points, or 0.03%, to 33,743.84.
Stocks pared losses during afternoon trading, with the Dow recovering from a slide of more than 460 points. From its lows, the Nasdaq lost 2.34%.
Technology bore the brunt of session losses after Microsoft’s lackluster forecast fueled further growth concerns. The software giant was last trading flat after losing most of the session. Boeing ended slightly higher despite a failure in revenue and earnings.
“If the company is pessimistic about its own future, why should investors be optimistic? That’s pretty much the message we’re getting from the earnings season so far,” said Adam Sarhan, CEO of 50 Park Investments.
Investors bought shares early in the period on anticipation of better than expected numbers as companies scaled back and lowered their expectations. However, previous reports from all sectors have largely dashed those hopes as many companies share a bleak outlook, he said.
Investors brace themselves for some high profile corporate earnings this week as recession fears persist Tesla and IBM among companies scheduled to release numbers after the bell. To date, more than 19% of S&P 500 companies have reported fourth-quarter earnings, according to FactSet, with 68% of them delivering better-than-expected results.
However, according to Nick Raich, CEO of The Earnings Scout, that number is lagging behind historical trends. The average win rate for the fourth quarter is 79%, he pointed out in a note on Friday.
At Wednesday’s close, all three major moving averages for the week are higher, with the Nasdaq up 1.55%. The S&P and Dow are 1.1% higher.