Tech stocks are getting crushed
- Stocks were lower Wednesday, with the Nasdaq composite down 1.7%.
- Wall Street is weighing a busy earnings week against a combination of worries.
- Follow the US indices in real time here.
Stocks fell Wednesday as corporate earnings season failed to calm nerves about rising rates and the prospect of slowing economic growth around the world.
Technology companies were among the biggest losers, with the Nasdaq composite down 1.7%. Even after reporting a jump in subscribers last week, Netflix (-4.5%) was pulled down by the broader sell-off. Semiconductor companies, including AMD (-5.8%) and Nvidia (-4.2%), were also sharply lower.The Dow Jones industrial average shed 0.5%, or more than 100 points. The S&P 500 lost 0.9% and was on track for its sixth straight day of losses.
A combination of worries have weighed on Wall Street this month, with some concerned the Federal Reserve could raise borrowing rates at a pace that may become slightly restrictive in order to to keep inflation in check.
Adding to concerns, China reported last week that economic growth fell to the lowest level in a decade in the third quarter. The Shanghai composite was able to close 0.33% higher, however, after finding some relief in government promises to help prop up equities.
Jason Draho, head of American asset allocation at UBS, said signs of slowing demand in financial reports could weigh on sentiment in the US. Microsoft, Ford and Tesla are set to report after the bell.
"Overall, earnings results are good, but pockets of results, such as those in the Industrials sector, show the impact of tariffs and the slowdown in global trade," Draho said.
Boeing offered the Dow some relief Wednesday, jumping more than 3% after posting third-quarter earnings that beat analyst expectations and raising annual guidance. Other industrial companies had dimmed their profit outlook for the year a day earlier, with Caterpillar warning Chinese tariffs would push up its costs."Market technicals are showing signs of improving, with fewer stocks reaching 4-week lows yesterday and weak market depth of trading activity likely close to a bottom," Draho added.
"Technicals will likely have to stabilize before the market reaches a bottom and can start grinding higher on good fundamentals."