U.S. stocks tumbled in a broad sell-off on Wednesday as Alphabet shares slid after the Google parent posted disappointing earnings and as U.S. Treasury yields rose, reviving fears that interest rates could stay higher for longer.
Market Snapshot
The Dow fell 105.45 points, or 0.32%, to 33,035.93, the S&P 500 lost 60.91 points, or 1.43%, to 4,186.77 and the Nasdaq Composite dropped 318.65 points, or 2.43%, to 12,821.22.
Market Movers
Alphabet (GOOGL) posted earnings in the third quarter that beat analyst estimates but Google Cloud revenue grew just 22% to $8.4 billion, missing forecasts of $8.6 billion and slowing from 28% in the previous quarter. Alphabet shares dropped 9.5%.
Microsoft‘s (MSFT) fiscal first-quarter revenue jumped 13% to $56.5 billion and beat Wall Street expectations. Revenue in the company’s Azure cloud business rose 29%, ahead of the pace set in the previous quarter. Microsoft reported profit of $2.99 a share, well ahead of expectations of $2.65. The stock rose 3.1%.
Boeing (BA) reported a wider-than-expected loss in the third quarter. The aerospace company reaffirmed guidance for free cash flow of between $3 billion and $5 billion in 2023. The stock fell 2.5%.
SunPower (SPWR) dropped 18.2% after the solar panel maker said it would be restating financial statements for 2022 and for the first two quarters of 2023. SunPower said it determined “the value of consignment inventory of microinverter components at certain third-party locations had been overstated in the affected periods in the range of approximately $16 million to $20 million.”
PayPal Holdings (PYPL) declined 5.1% and Block (SQ) declined 8% after a warning from a major European payments company sent jitters through the industry.
Chip maker Texas Instruments (TXN) reported third-quarter revenue below analysts’ expectations and issued a forecast for its fiscal fourth quarter that also missed. Texas Instruments said it expects revenue in the fourth quarter of between $3.93 billion and $4.27 billion and earnings between $1.35 and $1.57 a share. Analysts were calling for revenue of $4.5 billion and adjusted earnings of $1.79 a share. The stock fell 3.5%.
General Dynamics (GD) was up 4% after third-quarter earnings and revenue at the defense company beat analysts’ forecasts.
WM (WM), previously known as Waste Management, was the S&P 500 ‘s top performer Wednesday, rising 6.1%, after beating third-quarter earnings estimates and raising guidance on free cash flow.
Shares of Snap (SNAP) fell 5.4% after the parent of Snapchat reported a third-quarter loss that was narrower than expected and revenue of $1.19 billion that beat analysts’ expectations. Daily active users were 406 million versus the 405.8 million estimate.
Shares of Teladoc (TDOC) closed down 3.9% after the virtual care company reported a narrower-than-expected third-quarter loss but revenue of $660 million that missed estimates.
Stride (LRN) reported a fiscal first-quarter profit of 11 cents a share, while analysts were forecasting a loss of 37 cents. Revenue in the period rose nearly 13% to $480.2 million. The stock jumped 18%.
Gap (GPS) rose 5.2% after shares of the retailer were upgraded to Overweight from Equal Weight at Wells Fargo, which cited “improved cost controls” and new management.
Thermo Fisher Scientific (TMO) slumped 5.5% after the leading maker of laboratory equipment and analytical instruments reported third-quarter sales short of Wall Street’s expectations and again slashed its full-year guidance.
Vicor (VICR) fell 27% after the maker of modular power components said bookings remained weak.
Market News
Meta Shares Slide After Warning on Economy Impacting Ads
Meta Platforms Inc. warned that its advertising business depends heavily on the macroeconomic environment for spending, sending shares down after an otherwise upbeat earnings report.
“We are very subject to volatility in the macro landscape,” Chief Financial Officer Susan Li said on a call with investors. “The revenue outlook is uncertain” for 2024.
Shares slid about 3% in extended trading.
Meta had appeared to recover from struggles in its ad business that began last year. Third-quarter sales were $34.2 billion, the company said Wednesday, compared with the average analyst estimate of $33.5 billion.
Morgan Stanley Names Ted Pick Its Next CEO
Morgan Stanley said late Wednesday that Co-President Edward “Ted” Pick will become its chief executive, effective Jan. 1.
Outgoing Chief Executive James Gorman will become executive chairman, Morgan Stanley said. Pick will also join the firm’s board of directors.
“The board has unanimously determined that Ted Pick is the right person to lead Morgan Stanley and build on the success the firm has achieved under James Gorman’s exceptional leadership,” the company said in a statement.