S&P 500 falls more than 1% to close below 4,200 for first time since May, Nasdaq notches worst day since February

Brian Evans
Hakyung Kim

The S&P 500 closed below a key level on Wednesday after disappointing quarterly results from Google-parent Alphabet and a rebound in interest rates.

The benchmark index fell 1.43% to close at 4,186.77, ending the day below the 4,200 level that was being widely watched by chart analysts. It was the first time the S&P 500 closed below this threshold since May. The Nasdaq Composite lost 2.43% to finish the session at 12,821.22 for its worst day since Feb. 21, when the index shed 2.5%. The Dow Jones Industrial Average fell 105.45 points, or 0.32% to 33,035.93.

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The S&P 500 fell below a key 4,200 level on Wednesday.

Alphabet shares tumbled more than 9% as its cloud business missed analysts' estimates, overshadowing its strong revenue growth and earnings beat. Class A shares of Alphabet registered their worst day since March 2020. The S&P 500 communication services sector shed 5.9%.

Shares of peer tech behemoths and Apple and Amazon meanwhile, slipped 1.3% and 5.6%, respectively. Amazon is set to report third-quarter results after the closing bell on Thursday.

While corporate earnings maintain investor focus this week, investors also kept an eye on yields, as they hovered near multiyear highs. The benchmark 10-year Treasury yield climbed nearly 11 basis points to about 4.95%. It traded above 5% earlier in the week, which rattled investors and hit tech shares.

"Earnings are dominating the headlines, but I can't take my eyes off the bond market," said Ed Moya, senior market analyst at Oanda. "We haven't seen this skyrocketing pace in yields since 1982 and that should spell trouble for stocks."

Microsoft stood out as an outlier among the decline in tech stocks on Wednesday, with shares gaining 3% after fiscal first-quarter results beat Wall Street estimates.

Tech firms IBM and Meta will post quarterly results in the afternoon. About 29% of S&P 500 companies have posted third-quarter earnings thus far. Of those companies, 78% have exceeded expectations.

Correction: An earlier version misstated the day when Microsoft outperformed other big tech stocks.

Wed, Oct 25 2023 4:16 PM EDT

Stocks close lower

Stocks closed lower on Wednesday, with the S&P 500 notching its lowest level since May while the Nasdaq Composite slid to its worst day of since February.

The benchmark S&P 500 ticked down 1.4% to close at 4,186.77, while the Nasdaq slipped 2.4% to 12,821.22. The Dow Jones Industrial Average fell 105.45 points, or 0.3%, to finish the session at 33,053.93.

— Brian Evans

Wed, Oct 25 2023 3:28 PM EDT

Bill Ackman reportedly made $200 million from his Treasury trade

Pershing Square's Bill Ackman pocketed about $200 million from his latest Treasury trade, the Financial Times reported Wednesday, citing people familiar with the bet.

The hedge fund manager revealed Monday he covered his bet against 30-year Treasurys, believing that investors may increasingly buy bonds as a safe haven because of growing geopolitical risks.

"There is too much risk in the world to remain short bonds at current long-term rates," Ackman said in a post on X, formerly known as Twitter, on Monday morning. "We covered our bond short."

The firm's flagship fund has rallied 11.6% this year through Oct. 17.

— Yun Li

Wed, Oct 25 2023 3:00 PM EDT

Schwab CEO says he has 'no concerns whatsoever' about the firm's stability

Charles Schwab CEO Walt Bettinger reassured financial advisors on Wednesday that the brokerage firm was not at high risk during the regional banking crisis this spring.

The rapid rise in interest rates earlier this year put pressure on financial institutions, especially those that held long-dated assets. Bettinger said that, while Schwab did suffer on-paper losses, the firm's duration was less than three years at the time of the banking turmoil and that there was no realistic risk of the losses causing a crisis at the company.

"The idea that we would have to liquidate everything was absurd. And it has proven to be absurd," Bettinger said at Schwab's Impact conference.

Bettinger did acknowledge that higher rates have hurt the company's earnings and stock price. Schwab's stock is down more than 40% year to date.

"I have no concerns whatsoever about our stability going forward. In time, the securities with losses will mature, they'll run off. Our revenue will grow even faster, and this will become an issue of history," Bettinger said.

— Jesse Pound

Wed, Oct 25 2023 2:46 PM EDT

Megacap technology stocks among Wednesday's worst performers

Popular technology stocks lagged on Wednesday, dragging down the S&P 500 and Nasdaq Composite by 1.4% and 2.3%, respectively.

Alphabet shares sank 10% and were on pace for their worst day since March 2020 after reporting cloud revenue that fell short of expectations. Dominant AI chipmaker Nvidia shed 4%, while Amazon dropped 5.5%.

Another contributor to Wednesday's declines was Meta Platforms. The Facebook parent company slated to report earning after the bell slumped 4%. Salesforce and Advanced Micro Devices also lagged, falling 3.7% and 5.5%, respectively. Intel fell 5.3%.

Microsoft managed to buck the broader downtrend, gaining nearly 3% on stronger-than-expected results. Apple and Tesla were on pace for smaller losses, dipped 1.7% and 1%, respectively.

— Samantha Subin

Wed, Oct 25 2023 2:32 PM EDT

Nasdaq on verge of trading below 200-day for first time since March

The Nasdaq Composite dropped more than 2.3% during Wednesday's session, putting the tech-heavy index within close range of its 200-day moving average at 12,766.693 and on pace for its worst day since February.

The last time it closed below that threshold was March 13.

The 200-day is a closely watched momentum signal by Wall Street that can indicate long-term trends for an asset or index. A close below that level may suggest a downtrend.

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Nasdaq in danger of closing below 200-day

— Samantha Subin, Gina Francolla

Wed, Oct 25 2023 2:12 PM EDT

60 S&P 500 stocks hit new 52-week lows

Around one out of every 10 stocks in the S&P 500 are trading at lows not seen in at least a year during Wednesday's session.

Many on the list of 60 stocks hit share prices last seen in 2020, but the lows of a handful go back all the way to early 2014. The list of names hitting lows not seen in at least a year ranges from financial giants like Goldman Sachs to technology names including PayPal to consumer-focused companies such as Estee Lauder.

The moves come during a difficult day for the S&P 500 as a whole, with the broad index down about 1.4%.

— Alex Harring, Gina Francolla

Wed, Oct 25 2023 1:58 PM EDT

Alphabet, Meta Platforms weigh on communication services sector

Communications services is the worst-performing sector in the S&P 500 Wednesday, last down more than 6%.

Alphabet led the sector to the downside, dropping more than 9% during afternoon trading as investors parsed through disappointing results related to its cloud business. Match Group dropped 3.6%, while Meta Platforms slumped 3.2%. The Facebook parent is slated to report earnings after the bell.

AT&T, Charter Communications and Walt Disney fell more than 2% each.

— Samantha Subin

Wed, Oct 25 2023 1:39 PM EDT

S&P 500 trades below key level

Wednesday's sell-off pushed the S&P 500 below 4,200 — a closely watched technical level on Wall Street. It would be the index's first close below that mark since May 31, when it finished at 4,179.83.

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SPX could close below key level

— Fred Imbert

Wed, Oct 25 2023 1:02 PM EDT

Stocks making the biggest moves midday

Check out the companies making headlines in midday trading.

  • Microsoft — Shares jumped 2.5% as investors cheered the Xbox maker's fiscal first-quarter results released Tuesday. Microsoft posted almost 13% year-over-year revenue growth, and its Azure cloud segment saw revenue gain 29% for the quarter. The Windows software maker also posted a rise in profit due to slower operating expense growth.
  • Alphabet — Shares of the Google parent dropped more than 8%, putting it on pace for the worst day in nearly a year, after the dominant search engine owner reported cloud revenue that missed analyst expectations.
  • Norfolk Southern — The freight railroad dropped 5% on the back of disappointing third-quarter earnings. Norfolk Southern earned $2.65 per share, excluding items, while analysts polled by LSEG estimated a profit of $2.69 per share. Revenue was about in line with expectations.

Read the full list here.

— Sarah Min

Wed, Oct 25 2023 1:00 PM EDT

Boyd Gaming heads for worst day since March 2020

Shares of Boyd Gaming lost more than 11% on Wednesday, putting them on track for their biggest one-day sell-off since March 2020. The sell-off was sparked by lackluster third-quarter results.

EBITDAR — a key profit measure for casinos — was down by nearly 10% in the key midwest and south regions. The company was also under pressure from elevated labor, utilities and insurance costs.

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BYD plunges.

— Fred Imbert

Wed, Oct 25 2023 12:43 PM EDT

The Federal Reserve has tightened further than investors expect, Torsten Slok says

The Federal Reserve has tightened further than investors expect, according to Torsten Slok, chief economist at Apollo Global Management.

In fact, the economist expects the federal funds rate is actually 7%, not 5.5%, when accounting for the reduction in its balance sheet. The fed funds rate is set by the central bank and is the interest rate banks can charge for overnight loans.

"We never really had the balance sheet of forward guidance playing the major significant role that it does today," Slok said Wednesday on CNBC's "Squawk on the Street." "And when you quantify the impact, in particular, of running down the balance sheet as they're doing at the moment, they do find in their own calculations that the Fed funds rate today is not only 5.5%, but it's actually 7%."

"In other words, policy is a lot tighter than what they and we all think, simply because the other tools that they have are also helping in putting downward pressure on the economy," he said.

— Sarah Min

Wed, Oct 25 2023 11:22 AM EDT

Thermo Fisher Scientific plummets to 2-year low on weak outlook

Thermo Fisher Scientific plunged 8% in morning trading after the company cut its full-year earnings guidance. The company now sees adjusted earnings per share of $21.50 for 2023, well below pervious guidance calling for earnings between $22.28 and $22.72 per share.

The company's full-year guidance for 2024 also weighed on the stock. The company sees adjusted earnings of around $21.75 per share, below a FactSet estimate of $23.91 per share.

Shares fell to their lowest level since June 2021.

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TMO 1-day chart

— Lisa Kailai Han

Wed, Oct 25 2023 10:54 AM EDT

Intel leads Dow losses Wednesday

Intel, Dow and Boeing all declined more than 2% Wednesday, pulling the Dow Jones Industrial Average down by 64 points, or 0.2%. Dow and Boeing fell on the back of their third-quarter earnings announcements, while Intel is scheduled to report earnings on Thursday.

Meanwhile, Microsoft was the index's top gainer, adding 3% after its successful fiscal first quarter results.

— Hakyung Kim

Wed, Oct 25 2023 10:29 AM EDT

New home sales rise more than expected

In another sign of economic resiliency, new home sales in the U.S. rose much more than expected. Sales in September came in at 759,000, well above the August number of 675,000. That figure also exceeded a Dow Jones estimate of 680,000.

The data comes as investors fret over the possibility of higher Federal Reserve rates for longer than anticipated.

— Fred Imbert

Wed, Oct 25 2023 10:29 AM EDT

Alphabet falls on cloud disappointment

Alphabet shares sank more than 8%, in its biggest drop in roughly a year, a day after reporting third-quarter Google Cloud revenue that fell short of Wall Street's expectations.

The disappointment from Alphabet coincided with earnings from Microsoft that showed accelerating Azure growth.

Despite beating expectations on the top and bottom lines, the search giant's Google Cloud revenue came in at $8.41 billion, falling short of the $8.64 billion expected by analysts polled by StreetAccount.

— Samantha Subin

Wed, Oct 25 2023 10:19 AM EDT

Boeing gives up early gains

Boeing shares failed to maintain their early momentum and were down more than 1% as traders digested the company's third-quarter results. The company reported a bigger-than-expected quarterly loss and cut its 737 Max delivery forecast due to production issues.

Shares were up as much as 2.5% earlier in the session.

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BA falls

— Fred Imbert

Wed, Oct 25 2023 10:08 AM EDT

S&P 500 communications sector on track for worst day since 2022

The S&P 500 communications services sector pulled back nearly 5% on Tuesday, and was on track for its worst day since Oct. 26, 2022.

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S&P communication services sector.

Google-parent company Alphabet is the largest component of the segment, and shares are down nearly 9% so far on Wednesday.

— Brian Evans

Wed, Oct 25 2023 9:32 AM EDT

Nasdaq opens lower, tech stocks decline

Tech stocks led the Nasdaq Composite lower on Wednesday as Google-parent Alphabet stock dragged down the broader sector.

The tech-heavy Nasdaq fell 0.9%, while the S&P 500 slipped 0.5%. The Dow Jones Industrial Average climbed 76 points, or 0.2%.

— Brian Evans

Wed, Oct 25 2023 9:32 AM EDT

Nasdaq opens lower, tech stocks decline

Tech stocks led the Nasdaq Composite lower on Wednesday as Google-parent Alphabet stock dragged down the broader sector.

The tech-heavy Nasdaq fell 0.9%, while the S&P 500 slipped 0.5%. The Dow Jones Industrial Average climbed 76 points, or 0.2%.

— Brian Evans

Wed, Oct 25 2023 9:24 AM EDT

Alphabet has another negative reaction to its earnings

Alphabet shares were down more than 6% Wednesday morning. This marked the fourth time markets reacted negatively to the company's earnings results out of its last five reports, or since the start of October 2022, according to Bespoke Investment Group.

Nonetheless, the stock has rallied over 35% during this timeframe.

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Alphabet shares

— Hakyung Kim

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