S&P 500 ends slightly down after mixed earnings, opening glitch
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[January 25, 2023] By
Stephen Culp
NEW YORK (Reuters) - The S&P 500 ended nominally lower on Tuesday at the
close of a rocky session marked by a raft of mixed earnings and a
technical malfunction at the opening bell.
A spate of NYSE-listed stocks were halted at the top of the session due
to an apparent technical malfunction, which caused initial price
confusion and prompted an investigation by the U.S. Securities and
Exchange Commission (SEC).
More than 80 stocks were affected by the glitch, which caused wide
swings in opening prices in dozens of stocks, including Walmart Inc and
Nike Inc.
"Everybody’s having computer problems, first the airlines and now it’s
the NYSE," said Tim Ghriskey, senior portfolio strategist Ingalls &
Snyder in New York. "Seems like it was quickly corrected."
"Some of the prints were clearly bad," Ghriskey added. "It was a
surprise. Unexpected."
The Nasdaq joined the S&P 500 in negative territory, while the Dow ended
modestly higher.
Fourth quarter earnings season is in full swing, with 72 of the
companies in the S&P 500 having reported. Of those, 65% have beaten
consensus, just a hair below the 66% long-term average, according to
Refinitiv.
On aggregate, analysts now expect S&P 500 earnings 2.9% below the
year-ago quarter, down from the 1.6% year-on-year decline seen on Jan.
1, per Refinitiv.
"The Fed will take apart earnings reports and look at how the economy is
doing, given the rate hikes and other issues out there," Ghriskey said.
"We’re getting closer to that point where the Fed sees enough progress
in the inflation fight to stop the (interest) rate hikes and that’s why
the markets have reacted positively lately."
Economic data showed shallower-than-expected contraction in the
manufacturing and services sector in the first weeks of the year,
suggesting that the Federal Reserve's restrictive interest rates are
dampening demand.
The Dow Jones Industrial Average rose 104.4 points, or 0.31%, to
33,733.96, the S&P 500 lost 2.86 points, or 0.07%, to 4,016.95 and the
Nasdaq Composite dropped 30.14 points, or 0.27%, to 11,334.27.
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Traders work at the post where Carvana
Co. is traded on the floor of the New York Stock Exchange (NYSE) in
New York City, U.S., December 7, 2022. REUTERS/Brendan McDermid
Among the 11 major sectors of the S&P 500, industrials led the
percentage gainers, while communication services suffered the
biggest loss.
Intercontinental Exchange Inc, owner of the New York Stock Exchange,
dropped 2.2% as SEC investigators searched for the cause of
Tuesday's opening bell confusion.
Alphabet Inc shares dipped 2.1% after the Justice Department filed a
lawsuit against Google for abusing its dominance of the digital
advertising business.
Industrial conglomerates 3M Co and General Electric Co both provided
underwhelming forward guidance due to inflationary headwinds.
3M's shares lost 6.2% while General Electric's rose 1.2%.
Aerospace/defense companies Lockheed Martin Corp and Raytheon
Technologies Corp were a study in contrasts, with the former issuing
a disappointing profit forecast and the latter beating estimates on
solid travel demand.
Lockheed Martin and Raytheon were up 1.8% and 3.3%, respectively.
Railroad operator Union Pacific Corp missed profit estimates as
labor shortages and severe weather delayed shipments. Its shares
shed 3.3%.
Microsoft gained more than 4% in extended trading after narrowly
missing quarterly revenue estimates.
Advancing issues outnumbered declining ones on the NYSE by a
1.01-to-1 ratio; on Nasdaq, a 1.17-to-1 ratio favored decliners.
The S&P 500 posted 26 new 52-week highs and 10 new lows; the Nasdaq
Composite recorded 77 new highs and 22 new lows.
Volume on U.S. exchanges was 10.58 billion shares, compared with the
10.61 billion average over the last 20 trading days.
(Reporting by Stephen Culp; Additional reporting by Shreyashi Sanyal
and Johann M Cherian in Bengaluru; Editing by Aurora Ellis)
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