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The tech-heavy Nasdaq dipped 0.18% on Wednesday to close lower for the second day as corporate earnings roll on.
Nasdaq recently recorded a slightly lower close for a second day amid the latest batch of corporate quarterly earnings. The tech-heavy index closed lower on Wednesday for the second consecutive day as investors assessed corporate performances amid macroeconomic parameters. These parameters include rising interest rates, fluctuating energy prices, scarcity in tech raw materials (semiconductors), and mounting recession fears.
The latest Nasdaq lower close saw the index dip 0.18% to 11,313.36, with the S&P 500 sliding 0.02% to close at 4,016.22. In addition, the Dow Jones Industrial Average also registered a marginal gain of 9.88 points, or 0.03%, to close at 33,743.84.
Most stocks pared their losses during the afternoon trading session, with the Dow recovering from a 460+ point plunge. Meanwhile, the Nasdaq initially shed over 2% at its lows.
Nasdaq Sees Lower Close Following Weak Microsoft Guidance
Tech stocks wallowed in lows for most of the session following Microsoft’s (NASDAQ: MSFT) lackluster guidance. Growth concerns regarding the besieged tech sector intensified after the software and consumer electronics giant forecasted a lower-than-anticipated fiscal Q3 revenue. Following its underwhelming quarterly results, Microsoft expected between $50.5 billion and $51.5 billion in revenue for the next quarter. However, analysts were expecting at least $52 billion in revenue for the same period.
Microsoft also took a $1.2 billion charge in the quarter following its decision to cut off 1,000 workers, revise its hardware lineup, and strengthen leases. However, most notable within the charge is the $800 million in employee severance costs.
In other recent quarterly reports, Boeing (NYSE: BA) recorded a slightly higher finish despite falling short on top and bottom lines. The aeronautics manufacturing giant ascribed its quarterly loss to labor and supply constraints. However, despite these unsavory operational elements, Boeing CEO Dave Calhoun remained optimistic. In the company’s statement, Calhoun explained:
“We had a solid fourth quarter, and 2022 proved to be an important year in our recovery. Demand across our portfolio is strong, and we remain focused on driving stability in our operations and within the supply chain to meet our commitments in 2023 and beyond.”
Furthermore, the CEO also stressed that Boeing remained committed to its business while innovating and prioritizing safety. The company saw increased revenue from higher aircraft sales and delivery demand for the quarter. Calhoun concluded:
“We’re proud of how we closed out 2022, and despite the hurdles in front of us, we’re confident in our path ahead.”
Uninspiring Corporate Guidance to Largely to Blame for Lackluster Performances
CEO of 50 Park Investments, Adam Sarhan, weighed in on the latest earnings season and a general decline in performance. In his opinion, the decline in corporate fortune is due to the companies losing faith in themselves, influencing investor decisions.
“If the company is bearish on its own future, why should investors be bullish? That’s pretty much the message we’re getting from earnings season so far,” said he.
Investors brace for more high-profile corporate earnings this week, with Tesla (NASDAQ: TSLA) and IBM (NYSE: IBM) slated to report amid recession fears.