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S&P 500 off lows as Microsoft cuts losses, but Alphabet weighs

Stock Markets Jan 25, 2023 02:55PM ET
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By Yasin Ebrahim

Investing.com -- The S&P 500 moved off lows Wednesday, as investors weighed up a slump in Alphabet against a rebound in Microsoft despite the latter's mixed quarterly results and underwhelming outlook on growth ahead.

The S&P 500 fell 0.3%, the Dow Jones Industrial Average fell 0.1%, or 35 points, and the Nasdaq Composite was down 0.4%.

Microsoft Corporation (NASDAQ:MSFT) recovered intraday losses to trade flat after reporting quarterly results that beat on the top line, led by surprise strength in its cloud business, though revenue missed estimates and the company flagged a weaker outlook ahead.

Some on Wall Street, however, believe Microsoft’s cloud growth could reaccelerate sooner than expected, and the firm’s recent efforts to cut costs will begin to boost growth as soon as the fiscal fourth quarter.

“Microsoft’s expense efficiencies, meanwhile, will start to bear fruit in 4Q with continued tailwinds into FY24, we believe earnings and revenue growth could have troughed in F2Q23 followed by stability and potential re-acceleration towards the end of CY23, which is why we reaffirm our Buy rating and $315 PT,” Goldman Sachs said.

Alphabet Inc (NASDAQ:GOOGL), however, added to losses from a day earlier, falling 3% after the tech giant cut another 1,800 jobs in California on Wednesday.

Semiconductor stocks, meanwhile, were kept in the red by a 1% fall in chip bellwether Texas Instruments Incorporated (NASDAQ:TXN) after the chipmaker misses quarterly revenue estimates, and guidance on earnings fell short of analysts’ estimates.

“TXN confirmed that all segments (ex-auto) were weak in 4Q and were expected to weaken further in 1Q as customers reduce inventory,” Credit Suisse said in a note. “[P]otential incremental margin headwinds keeps us on the sideline as we await more detail from next week’s call,” it added.

Boeing Co (NYSE:BA), a major Dow component, cut losses to trade nearly 1% higher even as the aircraft maker reported a surprise loss, though said that underlying demand remained "strong."

Financials were also a source of support for the broader market’s move off session lows as sentiment on regional banks was boosted by a surge in U.S. Bancorp (NYSE:USB) on better-than-expected fourth-quarter earnings.

Capital One Financial Corporation (NYSE:COF) was also in the ascendency, up more than 7%, shrugging off quarterly results that fell short of Wall Street estimates.

In other earnings news, AT&T Inc (NYSE:T) delivered quarterly results that beat on the bottom line as the telecommunications company racked up more wireless subscribers than expected in the fourth quarter.

In other news, Media tycoon Rupert Murdoch withdrew a proposal to merge Fox Corp (NASDAQ:FOXA) and News Corp (NASDAQ:NWS), sending both shares 4% and 2% higher, respectively.

S&P 500 off lows as Microsoft cuts losses, but Alphabet weighs
 

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Comments (3)
animus advertere
animus advertere Jan 25, 2023 4:12PM ET
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Not investors. Algos.
Mitchel Pioneer
Mitchel Pioneer Jan 25, 2023 4:05PM ET
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And in true form, the DOW miraculously closes in the green, magically "recovering" from a 400 point loss, with the "recovery" flagrantly beginning at 11AM.  Can't say it enough.  The US Ponzi Scheme is the BIGGEST INVESTMENT JOKE IN THE WORLD.
Maximus Maximus
Maximus Maximus Jan 25, 2023 4:05PM ET
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polly wants a cracker..
First Last
First Last Jan 25, 2023 4:05PM ET
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SPX red at close, and further red now.  DOW is a noob index.
First Last
First Last Jan 25, 2023 4:05PM ET
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But you had to pick the DOW, which closed barely green, over the better SPX because you need to cherry-pick it for your drama-queen Chicken Little rant.
Mitchel Pioneer
Mitchel Pioneer Jan 25, 2023 3:27PM ET
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"Stocks Recover Losses," the most prolific headline in internet news history.  Another day of flagrant, criminal manipulation in the BIGGEST INVESTMENT JOKE IN THE WORLD.
First Last
First Last Jan 25, 2023 3:27PM ET
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Considering that the stock market trends up long-term, all losses are eventually and frequently undone.  That might not a noob's expectation.
 
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