Jan 25 (Reuters) – Wall Street’s main indices continued their slide on Wednesday, with the Nasdaq pulling back nearly 2% after forecasts from Microsoft weighed on tech stocks and a gloomy Boeing report stoked recession fears.
By 19:09 Moscow time, the Dow Jones index fell by 1.13% to 33.350.11 points, the S&P 500 index by 1.41% to 3.960.36 points, and the Nasdaq – by 1.92% to 11.117.09 points.
Microsoft shares fell 3.1% after the company downgraded sales forecasts for its cloud services division. The tech sector was down 2.1%, leading declines among the top 11 sectors in the S&P 500.
Paper shares Amazon.com Inc, Salesforce Inc and ServiceNow Inc, which are actively involved in cloud technologies, declined 1.37% to 2.4%.
Other big growth stocks, including Apple Inc, Alphabet Inc and Tesla Inc, were also down in the 1.6%-3.95% range.
Growth stocks rallied in January after last year’s losses, but investors are now focused on corporate quarterly reports as they try to gauge the impact of the Fed’s rate hikes and see if there is renewed enthusiasm for these stocks. Will it continue or not?
“The environment may look attractive as (stocks) of some cloud companies like Salesforce have fallen significantly, but people are still skeptical because of the weak economic news ahead of us,” said Robert Pavlik of Dakota Wealth.
“We still have inflation, the Fed is still raising interest rates, companies are laying off thousands of workers … We haven’t fully gone through the cycle yet.”
Most traders expect the Fed to hike interest rates by 25 basis points at its meeting next week. They suggest rates will peak at 4.91% in June, despite the fact that several regulatory officials have repeatedly advocated raising rates above the 5% threshold.
Boeing Co shares declined 3% in 2022 amid mounting losses and disappointing fourth-quarter revenue.
AT&T Inc rose 4.72% on better-than-expected quarterly subscriber growth, while Textron Inc added 0.6% on higher revenue.
Shares of News Corp jumped 7.7% to extend gains in the S&P 500 after Rupert Murdoch withdrew a proposal to merge News Corp and Fox Corp.
The original message in English is available on the code: (Shreyashi Sanyal and Johan M Cherian with contributions by Anki Biswas)