Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

S&P 500 off lows as Microsoft cuts losses, but Alphabet weighs

Published 01/26/2023, 04:06 AM
Updated 01/26/2023, 04:06 AM
© Reuters

© Reuters

By Yasin Ebrahim

Investing.com -- The S&P 500 moved off lows Wednesday, as investors weighed up a slump in Alphabet against a rebound in Microsoft despite the latter's mixed quarterly results and underwhelming outlook on growth ahead.

The S&P 500 fell 0.3%, the Dow Jones Industrial Average fell 0.1%, or 35 points, and the Nasdaq Composite was down 0.4%.

Microsoft Corporation (NASDAQ:MSFT) recovered intraday losses to trade flat after reporting quarterly results that beat on the top line, led by surprise strength in its cloud business, though revenue missed estimates and the company flagged a weaker outlook ahead.

Some on Wall Street, however, believe Microsoft’s cloud growth could reaccelerate sooner than expected, and the firm’s recent efforts to cut costs will begin to boost growth as soon as the fiscal fourth quarter.

“Microsoft’s expense efficiencies, meanwhile, will start to bear fruit in 4Q with continued tailwinds into FY24, we believe earnings and revenue growth could have troughed in F2Q23 followed by stability and potential re-acceleration towards the end of CY23, which is why we reaffirm our Buy rating and $315 PT,” Goldman Sachs said.

Alphabet Inc (NASDAQ:GOOGL), however, added to losses from a day earlier, falling 3% after the tech giant cut another 1,800 jobs in California on Wednesday.

Semiconductor stocks, meanwhile, were kept in the red by a 1% fall in chip bellwether Texas Instruments Incorporated (NASDAQ:TXN) after the chipmaker misses quarterly revenue estimates, and guidance on earnings fell short of analysts’ estimates.

“TXN confirmed that all segments (ex-auto) were weak in 4Q and were expected to weaken further in 1Q as customers reduce inventory,” Credit Suisse said in a note. “[P]otential incremental margin headwinds keeps us on the sideline as we await more detail from next week’s call,” it added.

Boeing Co (NYSE:BA), a major Dow component, cut losses to trade nearly 1% higher even as the aircraft maker reported a surprise loss, though said that underlying demand remained "strong."

Financials were also a source of support for the broader market’s move off session lows as sentiment on regional banks was boosted by a surge in U.S. Bancorp (NYSE:USB) on better-than-expected fourth-quarter earnings.

Capital One Financial Corporation (NYSE:COF) was also in the ascendency, up more than 7%, shrugging off quarterly results that fell short of Wall Street estimates.

In other earnings news, AT&T Inc (NYSE:T) delivered quarterly results that beat on the bottom line as the telecommunications company racked up more wireless subscribers than expected in the fourth quarter.

In other news, Media tycoon Rupert Murdoch withdrew a proposal to merge Fox Corp (NASDAQ:FOXA) and News Corp (NASDAQ:NWS), sending both shares 4% and 2% higher, respectively.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.