Nasdaq closes lower Monday as investors prepare for Big Tech earnings: Live updates

Alex Harring
Hakyung Kim

The Nasdaq Composite slipped on Monday as investors awaited the release of a slew of corporate earnings reports from big technology companies and fresh economic data.

The tech-heavy index slid 0.29% to close at 12,037.20. The Dow Jones Industrial Average ended up 66.44 points, or 0.2% to finish at 33,875.40 points. The S&P 500 closed 0.09% higher at 4,137.04.

Wall Street is looking ahead to mega-cap tech earnings results this week in what will mark the halfway point of earnings season. Alphabet, Microsoft, Amazon and Meta are among the high-interest names scheduled to announce their results for the first quarter.

"Everyone's just waiting for tech earnings," said Chris Harvey, head of equity strategy at Wells Fargo Securities. "This is a very, very busy week for earnings, so we're just treading water."

But it may be difficult for tech stocks to rally on the back of financial reports after already advancing significantly this year, said Chris Zaccarelli, chief investment officer at the Independent Advisor Alliance. Communication services and information technology stocks within the S&P 500 have posted the biggest year-to-date gains of the index's 11 total sectors, adding more than 19% and 18%, respectively.

"A lot of the good news is already in the price," Zaccarelli said of tech stocks. "It's going to take a lot more for tech earnings this week to really move the needle on the stock prices."

Roughly 76% of S&P 500 companies that have reported quarterly results through Monday morning beat analysts' earnings estimates, according to FactSet data. However, first-quarter earnings for S&P 500 companies are estimated to decline an overall 5.2%, per Refinitiv. 

Investors are also keeping a close eye on new economic data that will provide insight into whether inflation is cooling and if the Federal Reserve will announce another rate hike at its next meeting in early May. GDP numbers for the first quarter and April's consumer sentiment data are both among data points slated for release later in the week.

Lea la cobertura del mercado de hoy en español aquí.

Mon, Apr 24 2023 4:10 PM EDT

Nasdaq finishes lower, while Dow and S&P 500 edge higher

Two of the three major indexes were able to post modest gains in Monday's session.

The S&P 500 and Dow ended about 0.1% and 0.2% higher, respectively. But the Nasdaq Composite finished Monday's session about 0.3% lower as investors braced for Big Tech earnings this week.

— Alex Harring

Mon, Apr 24 2023 3:54 PM EDT

Market pricing is 'very optimistic,' says Innovator ETF strategist

The early earnings season results have showed companies beating a "pretty low bar" and the weakening economic outlook makes the market look uncomfortably pricey, according to Tim Urbanowicz, head of research and investment strategy at Innovator ETFs.

"We're kind of entering this point where we're starting to see what type of damage the hike cycle has already dealt, but we also don't have the inflation cycle in the bag. ... It's very optimistic, the pricing that we're seeing right now, especially with how low volatility is," Urbanowicz said.

This week's earnings slate could provide a wake-up call for markets. Urbanowicz pointed out that tech is the only one of the 11 GICS sectors to have a negative earnings surprise so far.

— Jesse Pound

Mon, Apr 24 2023 3:45 PM EDT

Morgan Stanley's Wilson says current earnings dynamic poses near-term risks to stocks, market entering a second half recovery 'reset'

Stocks may be headed for risky territory despite their performance so far this earnings season, according to Morgan Stanley's Mike Wilson.

To be sure, the chief U.S. equity strategist noted that stocks appear to be holding up well so far this earnings period, trading more in line with fundamentals than over the past several quarters. That's due in part to the fact that stocks have traded well heading into the period instead of selling off as in previous season.

But Wilson warns that that dynamic may be changing.

"This is different than the past few quarters and the beginning of what we think is a reset on expectations for a 2H EPS recovery," he said in a recent note to clients. "The Fed seems determined to fight inflation even if a more significant slowdown arrives."

Consensus expectations among analysts this quarter call for S&P 500 earnings per share growth to decline 9% year-over-year, but improve to a 4% year-over-year decline by the second quarter.

This setup, Wilson said, has held off many investors from selling in to first quarter results, given the belief that the earnings environment has reached its bottom. But Wilson casts doubt on those forecasts.

"We would agree with that conclusion if we believed the consensus forecasts," Wilson said. "Unfortunately, our forecasts are more pessimistic, and we don't expect the trough rate of change EPS growth quarter until 3Q or 4Q."

— Samantha Subin

Mon, Apr 24 2023 3:33 PM EDT

May Fed meeting will create 'overhang' on market this week, Oppenheimer investment strategist says

Though the Federal Reserve policy meeting isn't taking place until next week, Oppenheimer said the knowledge that it's on the horizon can add volatility to the market this week.

"This week with earnings season activity ramping up across a broad array of sectors we expect investors' anticipation of the Federal Reserve's upcoming FOMC meeting in the first week of May to add to the day to day tone and volatility of the markets," said John Stoltzfus, the firm's chief investment strategist.

Many market participants expect the central bank to implement another quarter-percentage point interest rate hike at the next meeting. Investors have been closely watching the Fed amid concerns that its rate hike campaign could now tip the economy into a slowdown or recession.

"A brace of uncertainty remains as an overhang to the markets as to how long the Fed will keep raising rates and whether or not its efforts will push the economy into recession before the current Fed fund hike cycle concludes," Stoltzfus said.

— Alex Harring

Mon, Apr 24 2023 3:22 PM EDT

Raymond James managing director: 'Investors are piling into defensive stocks'

Defensive and non-cyclical stocks are becoming favorited as the market senses more pressure to earnings pressure coming amid concerns over long-term rate volatility and the debt ceiling, according to Raymond James.

"Logic would suggest piling into defensive stocks, whose earnings are less impacted by an economic slowing, and guess what, investors are piling into defensive stocks," said Tavis McCourt, managing director of institutional equity strategy, in a note to clients Sunday.

McCourt added that defensive stocks that are considered expensive now will only get more expensive amid further weakening in what he called the "cyclical economy."

— Alex Harring

Mon, Apr 24 2023 3:12 PM EDT

Recent pullback in Block shares presents potential for a positive catalyst, says Bank of America

Bank of America said the resilience of mobile payment company Block's business model is currently underappreciated by investors.

Analyst Jason Kupferberg maintained his buy rating on Block. The bank believes Block shares could rally more than 40% from where shares closed on Friday.

Block shares are up just 2.3% in 2023 after Hindenburg Research released a short seller report on shares on March 23.

"We are bullish on SQ's full-fledge dual-sided ecosystem (Square and Cash App). Shares underperformed in '22 due to macro concerns, but we believe the stock is not being given enough credit for the general resilience the business has shown to date as well as its opex discipline," Kupferberg wrote in a Monday note.

"SQ also doesn't have the 'legacy tech' overhang of some other payment companies, which should make it easier to own. We believe that fundamentals and valuation (including our SOTP analysis) suggest ample upside from here," the analyst added.

— Hakyung Kim

Mon, Apr 24 2023 3:04 PM EDT

Bank of America says companies that beat earnings expectations are rewarded more than usual

More companies are beating their earnings expectations than usual after many on Wall Street reigned in hopes for the quarter, according to Bank of America. And the firm said they're more rewarded for doing so than in past seasons given investors' apprehension.

About one-quarter of S&P 500 companies have reported earnings as of Friday, which marked the end of the second week of the first-quarter earnings "season."

Strategist Savita Subramaniam said 68% of companies have beat estimates for earnings per share, which is higher than the 63% beat rate seen historically in the first two weeks on the season. Three-quarters, or 75%, beat sales expectations in the first two weeks against the 59% historical average.

Meanwhile, 55% of companies that reported in the first two weeks beat expectations for both earnings per share and sales. That's higher than the historical average of 44% in the same period.

The caution for investors led to higher upsides than normal for those that beat expectations. Companies that surprised to the upside outperformed the S&P 500 in the next trading day by 200 points, a larger beat than the historical average of 150 basis points, Subramaniam said. On the other hand, she said companies that missed expectations got somewhat of a "pass," underperforming the index by 90 basis points in the next session compared with an average gap of 238 basis points.

— Alex Harring

Mon, Apr 24 2023 3:03 PM EDT

Where the indexes stand heading into the final hour

With one of hour of trading left, the three major indexes were showing a mixed performance.

The Dow was up just 28 points, which is less than 0.1%, while the S&P 500 was down less than 0.1% below its flatline. Both have flickered around their respective flatlines over the course of the day.

Meanwhile, the Nasdaq Composite was down 0.3%.

— Alex Harring

Mon, Apr 24 2023 2:44 PM EDT

The S&P 500 could could turn to the lower end of a tight trading range, BTIG says

The S&P 500 could resort to the lower end of an already tight trading range, according to BTIG chief market technician Jonathan Krinsky.

Recent weeks have seen the benchmark index trade between 4,070 to 4,170, while being stuck in a broader range of 3,800 to 4,200 for the majority of the last 12 months, according to Krinsky.

He says that despite positive factors like a 15-month low for the CBOE Volatility Index (VIX), momentum is starting to slow as the seemingly bullish season wanes.

"We think resolution to the small range comes this week with ~20% of SPX components reporting earnings. Ultimately, we continue to expect the bigger range to break lower (sub 3800)," Krinsky said.

The index closed Friday's session at 4,133.52.

See Chart...
The S&P 500

— Brian Evans

Mon, Apr 24 2023 2:28 PM EDT slides after Wolfe Research downgrades shares tumbled 10% following a downgrade from Wolfe Research.

Analyst Joshua Tilton said in a Sunday note that the the firm is "skeptical" that the company can "hit its FY24 targets and are not willing to underwrite material revenue uplift from its planned transition to a consumption model."

Read more on the downgrade from Wolfe Research here.

See Chart...

— Samantha Subin

Mon, Apr 24 2023 2:11 PM EDT

Here's what the Investing Club expects from this week's Big Tech earnings

Alphabet, Microsoft, Meta Platforms and Amazon are reporting earnings this week. All of them are holdings in the portfolio of the CNBC Investing Club with Jim Cramer. The Club is anticipating a tough quarter with pockets of resiliency.

While profits are expected to be pressured by a slower economy, there are several key themes, including online advertising and cloud, to watch that could have huge potential to shape longer-term growth.

Investing Club members can read the full story here.

Mon, Apr 24 2023 1:59 PM EDT

Bernstein is still bullish on Chipotle shares after a strong 2023 rally

Chipotle shares still have a bit more upside even after soaring more than 30% in 2023, according to Bernstein.

The firm says the fast-casual food company could see 6% upside, even as the stock faces increasing pressure as to whether it can sustain its rally. Chipotle was previously chosen as a top pick for 2023 by Bernstein analysts.

"We believe that the success of Chicken-Al-Pastor, the Freepotle initiative and the underappreciated resilience of Chipotle in soft macro environments will support traffic growth in the near term, while we expect throughput improvements, more personalizations and growth of loyalty program users to offer long-term traffic tailwinds," analyst Danilo Gargiulo wrote in a Monday note.

Gargiulo maintained his overweight rating and $1,900 price target on shares. His price target implies an upside of 5.6% over where the stock closed last week.

"We look forward for further marks of success in the 1Q23 earning call that could boost our confidence in staffing levels, progress on throughput expansion and improvements in customer satisfaction," said Gargiulo.

— Hakyung Kim

Mon, Apr 24 2023 1:44 PM EDT

Stocks nearing end of bear market, chief investment officer says

The U.S. equities market is poised for a bull market in the second half of 2023, said James Demmert, chief investment officer of Main Street Research.

"We believe stocks are in the last phase of the bear market and investors should be wading into great companies that sell at reasonable valuations," he said. "As we continue through the last phase of the 2022-2023 bear market, investors should prepare for the opportunities and risks, and this earnings season will provide both across all sectors."

Demmert added that "the bear is almost over and a new exciting bull market awaits in the second half of 2023." He said investors should dip their toes into companies that sell at reasonable valuations, deliver on earnings expectations and provide positive guidance as they report. But he did note there's risk in stocks that are overvalued and report underwhelming earnings or provide disappointing expectations for future performance.

This week, investors will focus on Big Tech stocks with Alphabet, Meta and Amazon among those set to report.

Tech companies, including those with moats like Apple and Microsoft, should have enough market share to meet earnings expectations, he said. But he warned big tech stocks should not be "lumped together" and investors look at if each name can deliver earnings in a contracting economy. He said to avoid stocks like Amazon that trade at high price-to-earnings multiples.

— Alex Harring

Mon, Apr 24 2023 1:21 PM EDT

Lithium is nearly 70% off peak seen last year

Lithium has retreated nearly 70% off its 2022 peak.

The price of China 99.5% lithium carbonate has fallen 67.9% from its high seen last year, according to data released over the weekend by Bespoke Investment Group. That high came after the price rallied 1,386.6% from 2020.

Despite the move down, the price is still higher than where it traded at before the bulk of the rally took place, according to Bespoke.

— Alex Harring

Mon, Apr 24 2023 12:55 PM EDT

Stocks making the biggest moves in midday trading

These stocks are among those making the biggest moves in midday trading:

  • Fox Corp. — The media stock was under pressure after Fox News announced that conservative prime-time host Tucker Carlson has left the network, days after the network settled Dominion Voting Systems' defamation lawsuit for almost $800 million. Fox's class A and B shares were each down about 4%.
  • Albemarle — Shares of the lithium mining company gained 5.8%, recovering from last week's losses. The stock fell 10% on Friday amid reports that Chile was considering nationalizing its lithium mining industry. Albemarle CEO Kent Masters told CNBC's "Last Call" on Friday that Albemarle's existing mine and contracts in the country would not be affected.
  • First Republic — Shares of the San Francisco-based regional bank rallied ahead of its report postmarket Monday. The stock was recently up 9.4% but is still down more than 80% for the year.

Click here to see more stocks making midday moves.

— Pia Singh

Mon, Apr 24 2023 12:35 PM EDT

iShares quality ETF growing more popular with investors

The quality factor has been an outperformer in the opening months of 2023, as the rebound for some of the most profitable tech stocks has fueled solid gains for funds that track quality metrics.

The quality factor outperformed in every major market in the first quarter except the U.K., which has less of a tech sector, according to FTSE Russell.

investor interest has also been strong, with the iShares MSCI USA Quality Factor ETF (QUAL) has emerged as the most popular ETF in the U.S. this year.

The fund has also outperformed the S&P 500 on a total return basis.

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The QUAL ETF is outperforming the market in 2023.

— Jesse Pound

Mon, Apr 24 2023 12:14 PM EDT

First Solar slides following Citi downgrade

Shares of First Solar fell 4% after Citi said there's downside risks ahead.

Analyst Vikram Bagri downgraded the stock to a sell from neutral rating, saying that the "long-term outlook for margins and growth will draw increased scrutiny as the global supply of Si-based modules rises while the cost drops."

Bagri also adjusted the firm's price target on shares, reflecting more than 10% downside from Friday's close.

Despite Monday's drop, First Solar has still gained 37.8% this year.

CNBC Pro subscribers can read more on Citi's call.

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First Solar

— Samantha Subin

Mon, Apr 24 2023 11:52 AM EDT

Fox stock falls as Tucker Carlson leaves Fox News

Shares of Fox were under pressure after Fox News announced that host Tucker Carlson was leaving the cable network, effective immediately.

Fox's class A and B shares were each down about 4% after the announcement.

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Fox's stock fell after Tucker Carlson left Fox News.

Carlson's departure comes shortly Fox settled a defamation suit from Dominion Voting Systems for nearly $800 million.

"FOX News Media and Tucker Carlson have agreed to part ways," the company said in a statement on Monday. "We thank him for his service to the network as a host and prior to that as a contributor."

— Jesse Pound

Mon, Apr 24 2023 11:42 AM EDT

First Republic climbs ahead of earnings

Beaten-down regional bank stock First Republic is catching a bid ahead of the company's earnings report this afternoon.

Shares of First Republic climbed more than 11% in Monday morning trading.

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First Republic rose ahead of its earnings report on Monday.

After the bell today, investors and Wall Street analysts will be looking for updates on First Republic's deposit flows and insight into potential strategic actions that the bank could take to stabilize or sell itself.

The stock is still down more than 80% for the year.

— Jesse Pound

Mon, Apr 24 2023 11:18 AM EDT

First-quarter earnings are faring better than consensus expectations

Roughly one-third of S&P 500 members are set to report earnings this week, with investors looking to technology giants and heavyweights in the energy and industrials sectors for further clues about broader economic health. 

So far, earnings this quarter have fared better than expectations. According to a recent note from Goldman Sachs, 53% of companies in the broader index have beat consensus estimates by at least 1 standard deviation, higher than the 25-year average of 48%. Fifteen percent of companies have missed consensus estimates by at least 1 standard deviation, lower than the 25-year average of 14%.

Here are some key names reporting this week:

— Pia Singh

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