US STOCKS-Nasdaq underperforms on worries about tech earnings ahead

Bed Bath & Beyond

24/04/2023 21:45

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        * 
      Tesla falls after issuing higher 2023 spending forecast
    

        * 
      Microsoft, Amazon drag on the market ahead of reports
    

        * 
      First Republic Bank jumps ahead of results
    

        * 
      US House to vote on Republican debt limit bill this week
    

        * 
      Indexes mixed: Dow up 0.2%, S&P up 0.09%, Nasdaq down
0.29%
    

  
 (Adds preliminary closing prices, commentary)
    By Sinéad Carew, Sruthi Shankar and Ankika Biswas
       April 24 (Reuters) - The Nasdaq closed lower on Monday,
underperforming the S&P 500 and the Dow, with pressure from
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  finished down 1.5% after the automaker
raised its 2023 capital expenditure forecast to ramp up output,
making it the second biggest drag on the benchmark S&P 500
behind Microsoft Corp  MSFT.O .
    Shares in Microsoft, up more than 17% so far this year, were
 under pressure Monday as investors appeared anxious about its
results, due out on Tuesday. Another heavyweight laggard was
Amazon.com Inc  AMZN.O , which is on deck to report this week
along with Alphabet Inc  GOOGL.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.    
    
     The Dow Jones Industrial Average  .DJI  rose 66.44 points,
or 0.2%, to 33,875.4 while the S&P 500  .SPX  gained 3.52
points, or 0.09%, at 4,137.04. The Nasdaq Composite  .IXIC 
dropped 35.25 points, or 0.29%, to 12,037.20.
    Among the S&P 500's 11 major sectors, energy was the
strongest, rising 1.5%, while technology  .SPLRCT  was the
weakest, down 0.4%.
    Michael James, managing director of equity trading at
Wedbush Securities in Los Angeles, said the Philadelphia
semiconductor index  .SOX , which closed down 0.5%, was likely
underperforming due to 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.
    Amazon fell 0.7% while Meta pared earlier losses to close
off just 0.04%. Google's parent Alphabet managed a 0.5% gain.
AT&T Inc  T.N , which reported disappointing results on
Thursday, deepened last week's losses with a 3.8% drop on
Monday.
    Also dragging on the S&P 500 was air conditioner maker
Carrier Global Corp  CARR.N , which closed down 7.3%, after
reports, citing unidentified sources, said it 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 35.7% to 19
cents after it declared bankruptcy on Sunday. Retail rivals
including Target Corp  TGT.N  and Walmart Inc  WMT.N  gained
1.1% and 0.7% respectively on Monday.
    After closing up 12.2%, First Republic Bank  FRC.N  shares
lost ground in after-the-bell trading following the closely
watched regional bank's quarterly report, which showed its
deposits fell 41% in the first quarter. 
    The stock was last down almost 87% year-to-date as the U.S.
banking crisis sent investors to the exits.
    Advancing issues outnumbered decliners on the NYSE by a
1.32-to-1 ratio; on Nasdaq, a 1.41-to-1 ratio favored decliners.
    The S&P 500 posted 21 new 52-week highs and two new lows;
the Nasdaq Composite recorded 64 new highs and 201 new lows.
    On U.S. exchanges 9.54 billion shares changed hands compared
with the 10.30 billion average for the last 20 sessions. 

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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))