Wall Street bounced back on Wednesday following a steep drop the day before, with strong revenue forecasts from Microsoft and Visa boosting investors who have been about fretting about slowing global growth and rising interest rates.
Microsoft Corp rallied 5.8% after the software heavyweight late on Tuesday gave a strong revenue forecast, while payments network Visa Inc jumped 8.2% after it predicted revenue above pre-pandemic levels. Tuesday’s rally followed a steep selloff the day before that saw the Nasdaq drop to its lowest close since December 2020, with investors worrying that the U.S. Federal Reserve might raise interest rates more than expected in its fight against inflation.
The S&P 500 communication services index fell 2.4%, with Google-parent Alphabet dropping 2.4% after it reported that quarterly YouTube ad sales slowed and its revenue missed expectations. “What we’ve really been seeing is that misses are being punished a little more severely, but that beats are also being rewarded,” said Rob Haworth, a senior investment strategist at U.S. Bank Wealth Management in Seattle. “With interest rates where they are and the 10-year Treasury testing 2.8%, I think there is a big question about growth and valuations.”
Facebook-owner Meta Platforms Inc, which reports quarterly results after market close, fell 4.5%. Planemaker Boeing Co tumbled 8.6% after it said it was halting production of 777X jets through 2023 due to certification problems, as well as weak demand for the wide-body jet.
Nearly a third of the companies on the S&P 500 have reported results this week. Overall, earnings have been better than expected, with nearly 80% of the 176 companies in the S&P 500 that have reported so far beating Wall Street expectations. Typically, only 66% of companies beat estimates. In afternoon trading, the Dow Jones Industrial Average was up 1.1% at 33,606.64 points, while the S&P 500 gained 1.21% to 4,225.61.
The Nasdaq Composite added 1.07% to 12,624.46. Tesla Inc rebounded 2.6% following a 12% slump on Tuesday related to concerns that Chief Executive Elon Musk may have to sell shares to fund his buyout of Twitter Inc.
Toymaker Mattel Inc surged over 11% after a source told Reuters it was exploring a sale. Audio streaming platform Spotify Technology SA’s U.S.-listed shares tumbled 11.2% following a downbeat current-quarter revenue forecast.
Advancing issues outnumbered declining ones on the NYSE by a 1.66-to-1 ratio; on Nasdaq, a 1.17-to-1 ratio favored advancers. The S&P 500 posted 1 new 52-week highs and 58 new lows; the Nasdaq Composite recorded 19 new highs and 659 new lows.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)