US STOCKS-Nasdaq underperforms on worries about tech earnings ahead

Bed Bath & Beyond

24/04/2023 21:00

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    By Sinéad Carew, Sruthi Shankar and Ankika Biswas
       April 24 (Reuters) - The Nasdaq closed lower and
underperformed the S&P 500 and the Dow on Monday, pressured by
high-profile megacaps as investors awaited results from
companies including Microsoft while Tesla shares fell on
concerns about its spending plans.
    Tesla Inc  TSLA.O  fell after the automaker raised its 2023
capital expenditure forecast to ramp up output, weighing down
consumer discretionary stocks  .SPLRCD .
    It was one of the biggest drags on the benchmark S&P 500,
along with Microsoft Corp  MSFT.O , which was under pressure
ahead of its results due out on Tuesday. Also on deck this week
are reports from Alphabet Inc  GOOGL.O , Amazon.com Inc  AMZN.O 
and Meta Platforms Inc  META.O .
    A rally in these stocks has supported Wall Street this year,
so investors are worried about whether the gains can continue
given the gloomy economic outlook.
    "People are a little tentative that the outperformance may
not continue in earnings season, which thus far has been quite a
bit better than expected. Granted the bar was low," said Randy
Frederick, managing director, trading and derivatives at Charles
Schwab in Austin, Texas.
        Frederick also pointed to anxiety about upcoming
economic data such as first-quarter growth and inflation
readings.    
    
    According to preliminary data, the S&P 500
 .SPX  gained 3.74 points, or 0.09%, to end at 4,137.13 points,
while the Nasdaq Composite  .IXIC  lost 33.89 points, or 0.28%,
to 12,038.56. The Dow Jones Industrial Average  .DJI  rose 69.40
points, or 0.21%, to 33,878.36.
        Michael James, managing director of equity trading at
Wedbush Securities in Los Angeles, said the Philadelphia
semiconductor index  .SOX  would likely underperform because of
increasing global tensions with 
    China.  
    U.S. stocks have largely held steady through the start of
the earnings season on stronger-than-expected results from big
banks, allaying concerns about a contagion from the regional
banking crisis in March.
    Of the 90 S&P 500 companies that have reported first-quarter
results so far, nearly 77% have topped analysts' estimates
compared with the long-term average beat rate of 66%, as per
Refinitiv IBES data.
    Early readings of first-quarter U.S. GDP, personal consumer
expenditure index (PCE) for March, and April consumer confidence
are among the data scheduled for release this week. 
    Mixed data last week cemented bets of a 25-basis-point rate
hike by the Federal Reserve in May, with money market traders
pricing in a 92% chance of such a move, according to CME Group's
Fedwatch tool. Fed policymakers said in the past week that the
central bank has more work to do to bring down inflation.
    U.S. Treasury yields eased following recent signs of slowing
inflation and economic activity, though investors appeared
increasingly concerned about a government spending stand-off and
the potential for the United States to hit its debt ceiling
sooner than expected.  US/ 
    U.S. House of Representatives Speaker Kevin McCarthy said
the House would vote on his spending and debt bill this week.
    Also dragging on the S&P 500 was air conditioner maker
Carrier Global Corp  CARR.N  after reports, citing unidentified
sources, said the company was in advanced talks to acquire
German industrial manufacturer Viessmann for more than $12
billion including debt. 
    In the penny-stock department, shares in once-popular home
goods retailer Bed Bath & Beyond  BBBY.O  tumbled after it
declared bankruptcy on Sunday. Retail rivals including Target
Corp  TGT.N  and Walmart Inc  WMT.N  were gaining ground during
Monday's session. 
    First Republic Bank  FRC.N  shares rose ahead of the
regional bank's quarterly report. The stock has sunk 88% this
year, triggered by the U.S. banking crisis.

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US megapcap stocks recover somewhat after 2022 collapse    https://tmsnrt.rs/43W5UHI
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 (Reporting by Sinéad Carew in New York, Sruthi Shankar and
Ankika Biswas in Bengaluru; Editing by Vinay Dwivedi and Richard
Chang)
 ((sinead.carew@thomsonreuters.com))