by Stephen Culp
NEW YORK (Reuters) – The New York Stock Exchange ended sharply lower on Wednesday, the day after the post-closing publication of disappointing quarterly results from Alphabet, while bond yields rose, giving renewed depth to fears of see interest rates remain high for a long time.
The Dow Jones index fell 0.32%, or 105.45 points, to 33,035.93 points.
The broader S&P-500 lost 60.91 points, or 1.43%, to 4,186.77 points.
The Nasdaq Composite fell 318.65 points (2.43%) to 12,821.22 points.
This is a fifth session in the red in six days for the S&P-500, while the Nasdaq experienced the most marked decline, weighed down by high-growth stocks which are particularly sensitive to interest rates.
Alphabet plunged after publishing disappointing results the day before for its cloud computing activity, seen as an illustration of corporate budget cuts in this area and fueling fears of an economic slowdown.
Meta Platforms reported its results after the close.
“The results are mixed, and it’s migraine-inducing, but the real problem is bond yields which show no signs of weakening,” said Ryan Detrick, chief strategist at Carson Group in Omaha.
The yield on ten-year US Treasury bonds rose on Wednesday to approach the 5% threshold.
Data published today showed the strength of sales of new real estate in the United States, while borrowing rates in this area reached peaks in 23 years, confirming market fears of having rates of interest still very high next year.
“The rate shadow continues to hang over the market, as it should,” said Jay Hatfield, portfolio manager at InfraCap in New York, noting that real estate data has been “very strong, much higher forecasts”.
Earnings season is picking up steam this week, with nearly a third of S&P-500 companies reporting. So far, of the 146 companies reporting their quarterly results, 80% have exceeded expectations.
While at the start of the month they anticipated year-on-year growth of 1.6% in quarterly turnover for S&P-500 companies, analysts now expect an increase of 2.6%.
In the wake of Alphabet’s decline, the communications services sector experienced its largest single-session percentage decline since last February.
Among other major S&P-500 sectors, utilities saw a slight gain.
On the values side, Microsoft increased by 3.1% after reporting quarterly results above expectations, thanks in particular to the solidity of its “cloud” division.
( Jean Terzian)
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