BY COMFORT OGBONNA
U.S. stock indexes closed lower on Wednesday as chip stocks declined and investors awaited a series of corporate earnings reports. Microsoft and Meta Platforms reported earnings after the bell, with both companies exceeding quarterly revenue estimates.
Shares of Alphabet, the first of the five “Magnificent Seven” mega-cap stocks to report results this week, rose 2.8% after the company beat expectations for third-quarter revenue and profit on Tuesday.
Alphabet’s gains helped offset the decline in chip stocks, which were negatively impacted by disappointing forecasts from Advanced Micro Devices and Qorvo, whose shares fell 10.6% and 27.3%, respectively. Meanwhile, shares of Super Micro Computer plunged 32.6% after Ernst & Young resigned as the company’s accountant, and Nvidia slipped 1.4%.
The information technology sector was the biggest sectoral decliner, falling 1.34%, while Alphabet’s gains lifted the communication services sector. “Qorvo, Advanced Micro, and Super Micro—those are three significant moves that are causing some concern and diminishing the positive impact of Google’s stellar report last night,” said Michael James, managing director of equity trading at Wedbush Securities.
“The clear focus will be on the stock-specific reports and guidance,” James added.
The Dow Jones Industrial Average fell 91.51 points, or 0.22%, to 42,141.54. The S&P 500 lost 19.25 points, or 0.33%, to 5,813.67, and the Nasdaq Composite declined by 104.82 points, or 0.56%, to 18,607.93.
In economic data, the U.S. gross domestic product increased at an annualized rate of 2.8%, according to the Commerce Department’s advance estimate for third-quarter GDP, slightly below economists’ forecast of 3.0% growth. A separate report showed that U.S. private payrolls grew by a higher-than-expected 233,000 jobs in October.
The close race between U.S. presidential candidates Kamala Harris and Donald Trump was also on investors’ minds ahead of the Nov. 5 election.
Eli Lilly fell 6.2% after missing sales estimates for its popular weight-loss and diabetes drugs. Starbucks reported earnings after the close, showing a drop in quarterly sales due to declining global demand.
On the NYSE, advancing issues outnumbered declining ones by a ratio of 1.01-to-1. There were 210 new highs and 52 new lows on the NYSE. The S&P 500 posted 24 new 52-week highs and five new lows, while the Nasdaq Composite recorded 126 new highs and 98 new lows.