4:12pm: S&P 500 ends the session unchanged
The Dow closed Wednesday down 80 points, 0.2%, at 33,897, while the Nasdaq Composite added 4 points to 12,157 and the S&P 500 was flat at 4,155. The small-cap Russell 2000 index gained 2 points, 0.1%, to 1,797.
Investors haven't been wowed by earning season thus far.
“The market’s really been sort of ho-hum in this earnings season so far,” said Sandi Bragar, Aspiriant’s chief client officer. “We’ve been concerned about shrinking corporate profits and earnings going lower, and that is starting to play out certainly in companies that have reported so far, but the market hasn’t really been reacting too much to that.”
Netflix was among the day's laggards after first-quarter new subscriber numbers fell short of expectations. The streaming giant saw its shares fall 3.2% to $323.12.
Meanwhile, Tesla and IBM are among the companies publishing results after the bell Wednesday.
12.05pm: Stocks slip on weaker financial results from key companies
US stocks were lower in noon trading following disappointing financial results from companies such as Morgan Stanley and Netflix.
At midday, the Dow lost 91 points to 33,886, while the S&P 500 eased 6 points at 4,149 and the tech-heavy Nasdaq slipped 14 points to 12,139.
“Overall, Q1 earnings may not move the needle much, in our view,” Barclay’s Emmanuel Cau wrote in a note to clients.
“However, stocks have rallied, but positioning remains cautious, so more earnings-driven upside would extend the pain trade,” he added.
Notable movers included shares of Netflix, Inc, which fell nearly 4% after the streaming giant’s 1Q revenue fell short of expectations and it delayed the broad rollout of its password-sharing crackdown.
9:35am: Hawkish comments weigh on sentiment
The three major indexes started the day off in the red as earnings reports continued to roll in following hawkish comments from Federal Reserve officials.
Expectations that the Fed could keep interest rates higher for longer have pushed stocks lower as treasury yields rise, FOREX.com market analyst Fiona Cincotta said.
“Atlanta Federal President Raphael Bostic and James Bullard made hawkish comments yesterday, with James Bullard saying that interest rates need to rise to 5.5% to 5.75%,” she said. “Recent economic data has been mixed, with the US expected to enter a mild recession later this year or early 2024.”
Cinoctta noted that to date, earnings have broadly supported equities, given that the bar going into reporting season was so low. “Regional banks, which could have been a potential minefield have not been the picture of health, but haven’t fallen off a cliff either,” she pointed out.
Just after the opening bell, the Nasdaq had shed 85 points or 0.7% at 12,068 points, the S&P 500 was down 18 points or 0.4% at 4,137 points, and the Dow Jones had slipped 43 points or 0.1% at 33,934 points.
7:50am: Earnings versus interest rates
Wall Street is set to open lower as investors weigh up quarterly earnings reports that have been mostly better than expected against further calls by Federal Reserve officials for interest rates to continue rising.
Futures for the Dow Jones Industrial Average (DJIA) fell 0.3% in Wednesday pre-market trading, while those for the broader S&P 500 index shed 0.5%, and contracts for the Nasdaq-100 declined 0.7%.
The main US benchmarks ended close to their opening levels on Tuesday. The DJIA ended down less than 0.1% at 33,976, while the Nasdaq Composite fell 4 points to 12,153, and the S&P 500 gained just under 0.1% to 4,155.
“Markets traded flat as the reporting season gathered pace with mixed results, and with recessionary concerns remaining close to the surface,” commented Richard Hunter, head of markets at interactive investor, commented.
“The reporting season is still in its infancy but on the whole has exceeded expectations so far, albeit against an extremely low level of expectations," he added.
Hunter noted that the banks have inevitably seen a rise in interest income given the latest round of rate hikes, while the likes of Bank of America and JP Morgan assuaged any immediate concerns on a potentially slowing economy.
“Risk sentiment is now again focused on the Fed's next monetary policy action. Fed officials continue to offer contradictory signals, adding to the already confused picture,” added Naeem Aslam, chief investment officer at Zaye Capital Markets.
St Louis Fed president James Bullard said yesterday that interest rates should continue to rise due to persistent inflation and an economy that is still growing. Separately, Atlanta Federal president Raphael Bostic said the US central bank probably has one more interest rate hike ahead of it as it tackles inflation.
“If we pay heed to James Bullard's remarks, it is evident that the Fed has not completed its mission of increasing interest rates. He expects the terminal rate to be about 5.50% to 5.75%,” Aslam added.
Meanwhile, as earnings season progresses, companies reporting today include Tesla, Morgan Stanley, Airbus and IBM, among others.