Band Bansari Mayur Kamdar and Devik Jain
April 26 (Reuters) – The tech-heavy Nasdaq led Wall Street lower on Tuesday with a 3% plunge as nerves over earnings growth from megacaps and tech companies added to worries about slowing global growth and a more aggressive Federal Reserve.
Market-leading growth stocks have been hammered this year as investors worry about the impact of rising interest rates on their future earnings, while the COVID-19-led lockdown in China and the hawkish pivot from major central banks eclipsed what was better than expected. earnings season so far.
Promising sectors such as technology .SPLRCTCommunication Services .SPLRCL and consumer discretionary .SPLRCD fell between 2.8% and 4.1%, the biggest losers among the 11 major sectors of the S&P 500.
Alphabet Inc. GOOGL.O and Microsoft Corp. MSFT.O slipped 3.4% and 2.9%, respectively, ahead of their results after Tuesday’s closing bell. About a third of S&P 500 companies are expected to report results this week.
“If earnings and guidance are bad, we could have a lot more trouble. Earnings from these big guys are going to set the tone,” said Joe Saluzzi, co-director of trading at Themis Trading in Chatham, New Jersey.
“In addition to the war issues, you have COVID issues that could affect the supply chain. China is a major supplier, especially for some of these tech companies. That could be a big deal, so investors are watching this one carefully.”
The United States and its allies pledged new, ever-heavier weapons packages for Ukraine at a meeting on Tuesday, brushing aside Moscow’s threat that its support for kyiv could lead to nuclear war.
The S&P 500 energy sector .SPNY rose 2.1% as oil prices rebounded following reports that Russian gas supplies to Poland were halted.
At 11:36 a.m. ET, the Dow Jones Industrial Average .DJI was down 530.97 points, or 1.56%, at 33,518.49, the S&P 500 .SPX was down 81.69 points, or 1.90%, at 4,214.43, and the Nasdaq Composite .IXIC was down 394.64 points, or 3.03%, at 12,610.21.
Twitter TWTR.N fell 3%, a day after the social media platform agreed to sell itself to Tesla Inc TSLA.O leader Elon Musk, while Tesla fell 9.5%.
Of the 134 S&P 500 companies that have reported earnings so far, 80.6% have exceeded analysts’ earnings expectations, according to data from Refinitiv. In a typical quarter, 66% exceeded estimates.
General electric company GE.N fell 11.6% after forecasting full-year profits at the low end of its previous estimate.
United Parcel Service Inc. UPS.N fell 3.9% despite an increase in quarterly adjusted profit, while US hospital operator Universal Health Services Inc. UHS.N fell 9.1% after its earnings missed estimates.
Meanwhile, data showed U.S. consumer confidence fell slightly in April, although households planned to buy automobiles and many home appliances, which should help support consumer spending in the second quarter. .
Falling issues outnumbered advances for a 3.01-to-1 ratio on the NYSE and a 4.08-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs and 34 new lows, while the Nasdaq recorded 18 new highs and 464 new lows.
(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Anil D’Silva and Sriraj Kalluvila)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.