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After industry heavyweights GE, Johnson & Johnson (NYSE:JNJ), and 3M issued dire predictions for the year ahead, Wall Street fell on Tuesday. Shortly after the opening bell, a technical problem at the New York Stock Exchange briefly halted trading in some equities.
The problem affected more than 80 NYSE-listed firms, with shares of businesses including Nike Inc (NYSE:NKE) and Walmart Inc (NYSE:WMT) Inc experiencing significant swings in opening prices.
On a day heavily focused on earnings and the market response to some of the largest businesses’ quarterly releases, the issue caused traders to become confused.
Industrial conglomerate 3M Co fell 5.7% as it forecasted a gloomy first quarter.
Verizon Communications Inc. (NYSE:VZ) dipped 0.4% after predicting annual profit below projections, and Johnson & Johnson lost 1.3% after issuing a warning that a spike in China COVID-19 cases could hurt first-half sales in 2023.
Despite exceeding expectations for its most recent quarter of earnings, General Electric (NYSE:GE) Co declined 0.2% due to its poor annual profit outlook.
Earnings are currently the key issue, according to Fall Ainina, research director at James Investments. The term “profit recession” refers to consecutive quarters of negative earnings.
Wall Street’s main indexes started the week on a strong note amid renewed appetite for growth stocks following a battering last year.
Advanced Micro Devices (NASDAQ:AMD) Inc. lost 3.2% on Tuesday after posting its largest gain in more than two months on Monday after Bernstein downgraded it to “market-perform” from “outperform.”
The Philadelphia SE Semiconductor index dropped 0.7%, slipping from its one-month high.
Big Tech earnings could also determine whether renewed enthusiasm for growth stocks will be sustained.
In the long run, if the Fed pivots this year, we may expect a strong, upbeat buying impulse for technology, according to JPMorgan (NYSE:JPM) analysts. “In the immediate term, the answer seemingly resides with tech profits,” they wrote in a client note.
Microsoft Corp (NASDAQ:MSFT) is scheduled to report quarterly earnings after the bell.
Analysts now see fourth-quarter earnings for S&P 500 companies dropping 2.9% year-on-year, according to Refinitiv data.
Since businesses are anticipated to experience the full effects of the Federal Reserve’s rate-hike campaign, the fourth-quarter earnings season is closely followed. Next week, the central bank is anticipated to increase rates by another quarter-point.
At 12:31 PM ET, the Nasdaq Composite was down 14.26 points, or 0.13%, at 11,350.15, the S&P 500 was down 5.95 points, or 0.15%, and the Dow Jones Industrial Average was up 0.20 points, or 0.00%, at 33,629.76.
After the insurer announced better-than-expected fourth-quarter revenue, Travelers Companies (NYSE:TRV) gained 2.6%.
Alphabet (NASDAQ:GOOGL) Inc. fell 1.1% along with other significant growth stocks. About eight states will join the U.S. Justice Department in a lawsuit against Alphabet’s Google that is anticipated to be filed this week.
On the NYSE, the ratio of advancing issues to declining ones was 1.13 to 1. On the Nasdaq, declining items outnumbered advancing shares by a ratio of 1.08 to 1.
The Nasdaq posted 60 new highs and 18 new lows, compared to the S&P index’s 27 new 52-week highs and 10 new lows.
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