NEW YORK: Wall Street stocks finished mostly lower on Wednesday (April 26), shrugging off relatively solid corporate earnings amid recession worries, while First Republic Bank tanked again.
Most major earnings results over the past day have topped expectations, but the market’s “muted” response has been “a drag on investor sentiment”, said Briefing.com.
While shares of some companies such as Microsoft and Chipotle Mexican Grill surged on their reports, two of the three major US indices ended the day lower.
The Dow Jones Industrial Average fell 228.96 points, or 0.68%, to 33,301.87; and the S&P 500 lost 15.64 points, or 0.38%, at 4,055.99. The Nasdaq Composite index closed up 0.47%, or 55.19 points, at 11,854.35.
Economically sensitive transport stocks had their weakest day in 11 months, and bank stocks fell as regional bank First Republic hit a record low. Investors have been jittery about the banking sector since the recent failure of two US banks.
“The market is looking for direction on where the economy and companies are headed. We’ve had some good earnings reports come out but investors are realizing it’s not sufficient to clarify the path forward,” said Lisa Erickson, head of public markets at US Bank Wealth Management in Minneapolis.
Investors are waiting for more earnings reports and a key inflation reading on Friday as well as the Federal Reserve meeting next week, Erickson said.
First Republic, meanwhile, suffered another pummelling, ending nearly 30% lower.
“The concerns about a hard lending (or recession) are deepening and the concerns are largely focused on the banking industry,” said Hugh Johnson of Hugh Johnson Economics.
Among other big companies reporting results, Boeing shares gained 0.4%, while Google parent Alphabet slipped 0.2% and Texas Instruments shed 2.9%.
Activision Blizzard plunged 11.5% after British officials blocked Microsoft’s proposed US$69 billion takeover of the US video game company on antitrust grounds.
Thursday’s calendar includes the government’s advance estimate of first-quarter economic growth, alongside earnings reports from Amazon, American Airlines and construction equipment manufacturer Caterpillar. – AFP, Reuters