© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York, United States, October 18, 2021. REUTERS / Brendan McDermid
By Chuck Mikolajczak
NEW YORK (Reuters) – The Nasdaq ended little change on Wednesday, boosted by gains from Microsoft and parent company Google Alphabet (NASDAQ 🙂 on the heels of their quarterly results, but lower oil prices and a pullback Treasury yields weighed on the sectors cycle and pulled down.
Microsoft Corp (NASDAQ 🙂 gained 4.21% to close at a record high after forecasting a strong calendar year end, fueled in part by its booming cloud business. Alphabet Inc jumped 4.96% after posting a record quarterly profit thanks to higher ad sales.
Gains from both stocks were nearly 90 points up for the tech-rich Nasdaq, while Microsoft was the biggest boost for the Dow Industrials, S&P 500 and Nasdaq.
A decline in long-term US Treasury bond yields and a flattening of the yield curve also helped prop up growth names such as consumer discretionary and communications services, which were the only S&P sectors to see. progress that day.
The benchmark fell for a fourth day in a row, falling more than 6 basis points to put it on track for its biggest single-day decline since August 13.
“Growing names will get a boost not only from some results, but also because interest rates are lower,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors at Hunt Valley, Maryland.
“Interest rates are temporarily lower due to the fact that there is some uncertainty from a tax standpoint and what that might do. We know the Fed is going to cut, that was pretty much taken into account. matters, but now you have a lot of talk about what the future of the Federal Reserve might look like. “
The S&P 500 lost 266.19 points, or 0.74%, to 35,490.69, the S&P 500 lost 23.11 points, or 0.51%, to 4,551.68 and the addition of 0, 12 point, or unchanged, at 15,235.84.
In contrast, the flattening of the curve weakened financials, while a drop in crude prices after US inventory data pushed energy names down, with both sectors suffering their biggest drop as a percentage on one day in five weeks. JP Morgan shares fell 2.08% and Exxon Mobil (NYSE 🙂 was down 2.60%.
A strong start to the earnings season helped push the S&P 500 and Dow Jones to all-time highs this week, as investor concerns over companies’ ability to overcome supply chain bottlenecks, labor shortages and increasing price pressures have been assuaged for the time being. The Nasdaq is within 1% of the September 7 closing record.
“While we are by no means out of the woods, businesses are adapting faster than we anticipated,” Horneman said.
S&P 500 company profits are expected to grow 37.6% year-over-year in the third quarter. Of the 192 companies that reported profits, 82.8% exceeded analysts’ expectations, according to data from Refinitiv IBES.
The switch to growth stocks like tech stocks was also sparked after some Democrats in the US Senate proposed taxing unrealized gains of billionaires on their assets, while concerns about the timing of rate hikes resurfaced before the Federal Reserve’s policy meeting next week.
The S&P 500 Growth Index climbed about 0.28% while its value counterpart fell 1.44%.
Robinhood Markets Inc (NASDAQ 🙂 fell 10.44% after the retail broker reported poor third quarter earnings as trading levels declined for cryptocurrencies, including dogecoin.
Falling issues outnumbered advancing ones on the NYSE by a ratio of 2.43 to 1; on the Nasdaq, a ratio of 2.29 to 1 favored the declines.
The S&P 500 posted 36 new 52-week highs and 5 new lows; the Nasdaq Composite recorded 72 new highs and 133 new lows.
Volume on the U.S. exchanges was 11.74 billion shares, compared to an average of 10.43 billion for the full session over the past 20 trading days.