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S&P 500, Nasdaq slide, while Dow ends higher on mixed earnings picture

Stock Markets Oct 27, 2022 07:36PM ET
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© Reuters. FILE PHOTO: A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 7, 2022. REUTERS/Brendan McDermid
 
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By Stephen Culp

NEW YORK (Reuters) - The S&P 500 and the Nasdaq posted losses on Thursday, as investors contended with solid economic data and a mixed bag of corporate earnings.

The price-weighted Dow advanced, held aloft by industrials, while weakness in market-moving tech and tech-adjacent megacaps depressed the S&P 500 and Nasdaq in the wake of downbeat quarterly results and dour guidance.

"It’s very much a bifurcated market, a tale of two cities," said Tim Ghriskey, senior portfolio strategist Ingalls & Snyder in New York.

"There's lot of pressure on tech and tech-plus names, higher growth names," Ghriskey added. "On the flipside you’re seeing a lot of strength in other sectors, in particular consumer staples, energy, financials, industrials and utilities."

After the bell, Amazon (NASDAQ:AMZN) slumped 12%, erasing over $100 billion of its stock market value after the retail and tech heavyweight forecast a slowdown in sales growth for the holiday season, disappointing Wall Street and warning that inflation-wary consumers and businesses had less money to spend.

That sent S&P 500 futures down 0.5% and Nasdaq futures down 0.6%, showing traders expect Wall Street to open lower on Friday.

During Thursday's trading session, Meta Platforms plunged 24.6% after the Facebook (NASDAQ:META) parent followed the trend set by Microsoft Corp (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) Inc by providing gloomy forward guidance.

But heavy equipment maker Caterpillar Inc (NYSE:CAT) reported better-than-expected quarterly profit, sending its shares jumping 7.7% and providing the most muscle to the Dow's advance.

A third-quarter GDP reading showing the U.S. economy returned to growth in the July-Sept period, along with steady quarterly core inflation helped take the sting out of earnings. (Graphic: GDP, https://graphics.reuters.com/USA-STOCKS/mopakmqxopa/gdp.png)

Investors continue to scan the economic horizon for evidence that the barrage of aggressive interest rate hikes from the Federal Reserve, begun in March, are beginning to have the desired effect by cooling down the economy.

While a 75 basis point rate hike at the conclusion of its Nov. 1-2 policy meeting is all but assured, the likelihood of a smaller, 50 basis point hike in December was 55%, according to CME's FedWatch tool.

"The overriding theme is really the Fed. The Fed is going to control the direction of this market over the coming months," Ghriskey added.

At Thursday's close, the Dow Jones Industrial Average was up 194.17 points, or 0.61%, to 32,033.28, the S&P 500 lost 23.3 points, or 0.61%, to 3,807.3 and the Nasdaq Composite dropped 178.32 points, or 1.63%, to 10,792.68.

Among the 11 major sectors of the S&P 500, industrials had the biggest percentage gain, with communication services, weighed by Meta, down the most.

Third-quarter reporting season forges ahead at full speed, with 227 of the companies in the S&P 500 having reported. Of those, 74% have beaten consensus estimates.

Analysts now see aggregate S&P earnings growth of 2.5%, down from 4.5% at the beginning of October.

"In general we’ve seen earnings come in at or slightly above expectations," Ghriskey said. "But those expectations have been lowered throughout the quarter."

McDonald's Corp (NYSE:MCD) gained 3.3% after the fast food chain beat quarterly same-store sales estimates.

Shares of Southwest Airlines (NYSE:LUV) Co rose 2.7% after the carrier's quarterly profit topped consensus estimates.

Also after the bell, Intel (NASDAQ:INTC) rallied 5% after the chipmaker cut its full-year profit and revenue forecast and said it was targeting $3 billion in cost reductions in 2023.

Advancing issues outnumbered declining ones on the NYSE by a 1.18-to-1 ratio; on Nasdaq, a 1.10-to-1 ratio favored decliners.

The S&P 500 posted 23 new 52-week highs and 12 new lows; the Nasdaq Composite recorded 93 new highs and 119 new lows.

Volume on U.S. exchanges was 11.36 billion shares, compared with the 11.59 billion average over the last 20 trading days.

S&P 500, Nasdaq slide, while Dow ends higher on mixed earnings picture
 

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Comments (29)
Md Raihan
Md Raihan Oct 28, 2022 2:03AM ET
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Amazon
Kerry Ditto
Kerry Ditto Oct 28, 2022 12:21AM ET
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Maybe Amazon acquires Walmart cheap and names it Amazonmart, using Walmart stores as storage spaces.
Kerry Ditto
Kerry Ditto Oct 27, 2022 11:57PM ET
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People now become Football maniacs. They either watch games on home TVs or got to football stadiums. They don't have time to shop at local stores. They buy things online and watch football games online or go to stadiums to watch.
Kerry Ditto
Kerry Ditto Oct 27, 2022 10:53PM ET
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AMZN beat +37.07% EPS, Q3 earnings. massive upside rally is a sure thing. it will ignite massive stock market rally tomorrow. it shall be massive.
Kerry Ditto
Kerry Ditto Oct 27, 2022 9:58PM ET
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10 year T rate falling below 4% is a sign of Fed pivoting, as they should.
Kerry Ditto
Kerry Ditto Oct 27, 2022 6:48PM ET
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market is cautiously pivoting to massive rally, forcing fed to pivot
Oct 27, 2022 1:28PM ET
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Dow Jones daily chart if you apply Fibonacci to the swing it seems this should be the end. of the swing . it is either breakout situation or it will be below 30000 to the gap.
Oct 27, 2022 1:28PM ET
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31000*
amt hun
amt hun Oct 27, 2022 1:25PM ET
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Why does the Micron Technology Inc share get beaten up so badly? 4% in minus.
amt hun
amt hun Oct 27, 2022 1:25PM ET
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kaushal shah
kaushal shah Oct 27, 2022 12:31PM ET
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it's not about slowing economy it's about spending. enjoy your day & be ready for new highs.
First Last
First Last Oct 27, 2022 12:31PM ET
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We should all learn to enjoy life more w/ less spending; good for our souls, our wallets and for the environment.
Casador Del Oso
Casador Del Oso Oct 27, 2022 12:31PM ET
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Most people are not as disciplined as you with regards to their spending habits.
Stephen Fa
Stephen Fa Oct 27, 2022 12:31PM ET
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liberal pleb talk. Profit is king.
Casador Del Oso
Casador Del Oso Oct 27, 2022 12:27PM ET
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Aggressive monetary policy tightening can continue to fight inflation as it obviously isn't slowing down the economy.
Brad Albright
Brad Albright Oct 27, 2022 12:27PM ET
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The goal isn't to slow down the economy, its to lower inflation.
Bill Powers
Bill Powers Oct 27, 2022 12:27PM ET
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that's what casador said....
JIM VETTER
JIM VETTER Oct 27, 2022 12:27PM ET
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Powell acknowledged a recession would likely be needed to take inflation, among with Scott 2 million jobs being lost. While maybe not a goal, it's a sad necessity
 
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