Stocks fell Wednesday, but trimmed losses during afternoon trading, as investors analyzed the latest batch corporate earnings for clues into how rising rates have impacted U.S. companies.
The Dow Jones Industrial Average was last down 30 points, or 0.1%, after tumbling more than 460 points earlier in the session. The Nasdaq Composite shed 0.3%, after dropping as much as 2.34%, while the S&P 500 dipped 0.1%.
Technology bared the brunt of the session’s losses after Microsoft shared lackluster guidance that further fueled growth concerns. The software giant last traded flat after falling for most of the session. Boeing traded higher despite a top-and bottom-line miss.
“If the company is bearish on its own future, why should investors be bullish? That’s pretty much the message we’re getting from earnings season so far,” said Adam Sarhan CEO of 50 Park Investments.
Investors bought stocks heading into the period anticipating better-than-expected prints as companies reset and lowered expectations. But reports so far across sectors have mostly dashed those hopes as many companies share dismal outlooks, he said.
Investors are bracing for more high-profile corporate earnings this week as fears of a recession persist, with Tesla and IBM among the companies slated to post numbers after the bell. So far, more than 19% of S&P 500 companies have reported fourth-quarter earnings, with 68% of them posting stronger-than-expected results, according to FactSet.
This beat rate, however, lags historical trends, according to The Earnings Scout CEO Nick Raich. The average beat rate for fourth-quarter earnings is 79%, he pointed out in a Friday note.
Wednesday’s moves followed a three-day winning streak for the blue-chip Dow. All three major averages are trading higher for the week, with the Nasdaq last up 1.6%. The S&P and Dow are 1.1% higher.
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