Big tech stocks drop, dragging markets lower as banks report strong but uneven earnings outcomes
On Thursday, the S&P 500 dropped 0.21 percent to 5,937.34, snapping a three-day winning streak, as major tech stocks declined, according to CNBC.
The Nasdaq Composite fell 0.89 percent to 19,338.29, while the Dow Jones Industrial Average lost 68.42 points, or 0.16 percent, closing at 43,153.13.
Apple shares plunged 4 percent, marking their worst performance since August 5. Tesla declined more than 3 percent, while Nvidia fell nearly 2 percent, and Alphabet slipped around 1 percent.
The major average initially climbed earlier in the day, buoyed by strong corporate earnings. Morgan Stanley’s earnings exceeded expectations, lifting its stock by 4 percent.
Despite also beating bottom-line estimates, Bank of America saw its shares dip about 1 percent. These results followed positive earnings reports from JPMorgan Chase and Goldman Sachs, which also surpassed fourth-quarter projections.
According to FactSet, 77 percent of companies reporting so far have outperformed earnings estimates.
Keith Buchanan, senior portfolio manager at Globalt Investments, observed a cautious sentiment in the market.
He said, “There’s some heaviness and almost even exhaustion to this market, as we all try to give this bull market another leg to go and see what fuels the next upside moment.”
Buchanan added, “Earnings have started out with the banks being definitely a positive, but it seems there’s going to have to be more than that, and that’s what today’s action seems like.”
Thursday’s losses followed Wall Street’s strongest session since November.
On Wednesday, the Dow surged by over 700 points, while the S&P 500 and Nasdaq gained 1.8 percent and 2.5 percent, respectively. A moderate improvement in December’s core inflation data and robust earnings from US’s large banks spurred the rally.
Meanwhile, the 10-year US Treasury yield retreated significantly from a 14-month high reached earlier in the week, settling near 4.615 percent.
