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Tech stocks show weak results on Wall Street as trading day ends mixed

The S&P 500 fell 0.7% Wednesday after shedding an early gain, and the tech-heavy Nasdaq fell 2%.
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Posted at 1:21 PM, Oct 26, 2022
and last updated 2022-10-26 16:21:56-04

Stock ended mixed on Wall Street as investors weighed the latest batch of earnings reports, including weak results from several heavyweight technology companies.

The S&P 500 fell 0.7% Wednesday after shedding an early gain, and the tech-heavy Nasdaq fell 2%. The Dow ended just barely in the green, thanks in part to a big jump in Visa. Small-company stocks rose more than the rest of the market.

Google's parent company slumped after its ad sales slowed dramatically. Microsoft also fell. Long-term Treasury yields continued to pull back from their multiyear highs. Steady gains in those yields have sent mortgage rates sharply higher this year.

Visa rose 4.5% after reporting strong financial results and raising its dividend. Norfolk Southern gained 3.7% after reporting a surge in profits on an increase in shipping rates.

Outside of earnings, Mobileye Global, Intel's self-driving unit, rose 29.7% in its market debut.

Several other big companies are on deck to report earnings this week. Facebook's parent company, Meta, will report earnings later Wednesday, while Apple reports its results on Thursday.

Internet retail giant Amazon also reports its results on Thursday along with industrial bellwether Caterpillar and McDonald's.

Long-term Treasury yields continued to pull back from their multiyear highs. Gains in those rates have sent mortgage rates sharply higher this year.

The yield on the 10-year Treasury fell to 4.02% from 4.10% late Tuesday. The two-year yield fell to 4.43% from 4.48%.

Investors are mainly focused on earnings this week, but are waiting for several economic updates as they try to get a better picture of how inflation is impacting businesses, consumers and the Fed's plans for interest rate increases.

The government will release its first estimate on third-quarter gross domestic product on Thursday. The U.S. economy is already slowing down and actually contracted during the first half the year. On Friday the government will also release more data on personal income, consumption and spending.

The latest economic data is being closely watched for any signs of a slowdown as Wall Street tries to determine if and when the Fed might ease up on its interest rate increases. The central bank is expected to raise interest rates another three-quarters of a percentage point at its upcoming meeting in November. But traders have grown more confident that it will dial down to a more modest increase of 0.50 percentage points in December, according to CME Group.

Investors have been concerned that the Fed could go too far with rate increases and cause a recession by slowing the economy too much.

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Joe McDonald and Matt Ott contributed to this report.