Stocks fall amid busy week of earnings from Big Tech
A trader works on the floor of the New York Stock Exchange at the closing bell January 14, 2022, in New York, New York. (Photo by TIMOTHY A. CLARY/AFP via Getty Images)
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NEW YORK (AP) — Stocks fell in morning trading on Wall Street Tuesday as markets remain turbulent amid a busy week of earnings from some of the nation’s biggest companies.
The S&P 500 fell 1.5% as of 10:19 a.m. Eastern. The Dow Jones Industrial Average fell 330 points, or 1%, to 33,716 and the Nasdaq fell 2.5%.
The weak opening follows a similar start on Monday that turned into a late rally, partially led by technology stocks after Twitter agreed to sell itself to Tesla CEO Elon Musk. The social media company fell 2.1% Tuesday.
Technology stocks were once again directing the broader market and had some of the biggest losses. Companies in the sector, with their pricey values, tend to push the market up or down more forcefully. Microsoft fell 2.1% and Apple shed 2%. Both companies will report their latest financial results later Tuesday.
Retailers and other companies that rely on direct consumer spending also fell broadly. General Motors, which also reports its latest results later Tuesday, slipped 2.8%. Tesla slumped 7.3% and Nike fell 2.9%.
General Electric fell 10% for one of the sharpest losses on the market after telling investors that inflation and other pressures are weighing on its profit forecast for the year.
Bond yields fell sharply. The yield on the 10-year Treasury fell to 2.75% from 2.82% late Monday.
Energy companies gained ground along with a 1.6% rise in U.S. crude oil prices. Valero Energy rose 2.6%.
Earnings remain a key focus of Wall Street for the rest of the week. Airplane maker Boeing reports its results on Wednesday, along with Facebook parent Meta. Industrial bellwether Caterpillar reports its results on Thursday, along with McDonald’s and Amazon.
Investors are closely reviewing the latest round of corporate report cards to get a better sense of how different industries are handling rising inflation, which has prompted many companies to raise prices. The results will also give a clearer picture of how consumers are reacting to higher prices on everything from food to clothing and gasoline.
Persistently rising inflation has prompted the Federal Reserve to shift its monetary policy in order to aggressively fight inflation. The chair of the Fed has indicated the central bank may hike short-term interest rates by double the usual amount at upcoming meetings, starting next week. It has already raised its key overnight rate once, the first such increase since 2018.
Economists and investors are concerned that the U.S. economy might slow sharply or even fall into a recession because of the big interest-rate increases the Fed is expected to push through.