Wall Street falls as earnings shift into high gear

The fourth-quarter earnings season is being keenly watched as companies hope to feel the full impact of the Federal Reserve’s rate-hike campaign. The central bank is expected to raise rates by another quarter of a percentage point next week.

Industrial group 3M Co fell 5.9%, spurring declines among Dow components after reporting a decline in quarterly profit.

Verizon Communications Inc dropped 0.4% after forecasting annual profit below estimates, while Johnson & Johnson fell 0.5% as it warned that its medical services could be hit in the first half of 2023 due to a surge in COVID-19 cases in China. Equipment business will be affected.

General Electric Co. fell 1.1% on a disappointing profit forecast for the year, despite topping quarterly earnings estimates.

“The problem today is primarily earnings,” said Fall Annina, director of research at James Investments. “Now many are predicting a profit slump, with back-to-back quarters of negative earnings.”

Wall Street’s main indices began the earnings- and data-heavy week on a strong note amid renewed appetite for growth stocks after last year’s thrashing.

After posting its biggest gain in two months on Monday, Advanced Micro Devices Inc slipped 2.8% as Bernstein downgraded it from “outperform” to “market-perform”.

The Philadelphia SE Semiconductor index dropped 0.9% to slip from its one-month high.

Big Tech earnings may also determine whether renewed enthusiasm for growth stocks lasts.

“In the near term, the answer appears to be with tech earnings… Longer term, if we experience the Fed pivot this year, tech will be a strong, positive buy,” analysts at JP Morgan wrote in a client note. Would expect impulse.” Comment.

Microsoft Corp. is scheduled to report quarterly earnings after the bell.

According to data from Refinitiv, analysts now see fourth-quarter earnings at S&P 500 companies falling 2.9% year-over-year, nearly double the 1.6% annual decline seen at the beginning of the year.

At 10:20 a.m. ET, the Dow Jones Industrial Average was down 107.64 points, or 0.32%, at 33,521.92, the S&P 500 was down 17.28 points, or 0.43%, at 4,002.53, and the Nasdaq Composite was down 38.58 points, or 0.34%, at 11,325.83.

Trading in some stocks was briefly halted on the New York Stock Exchange shortly after the market opened on Tuesday.

Data showed US business activity contracted for a seventh straight month in January, but business confidence strengthened as the new year began.

Other major growth stocks also declined, with Alphabet Inc falling 1.1%. The US Justice Department is set to sue Google as soon as Tuesday, according to a report regarding its dominance over the digital advertising market.

Declining issues outnumbered advancers by a 1.75-to-1 ratio on the NYSE and 1.48-to-1 ratio on the Nasdaq.

The S&P Index posted 23 new 52-week highs and 10 new lows, while the Nasdaq posted 28 new highs and 12 new lows. (Reporting by Shreyashi Sanyal and Johan M Cherian in Bengaluru; Editing by Vinay Dwivedi and Anil D’Silva)

The text of this story is published from a wire agency feed without any modification.