Nasdaq closes slightly lower for second day as earnings season continues

The Nasdaq closed lower for a second day as investors studied the latest batch of corporate earnings and assessed the situation of the biggest companies amid rising rates and growing fears of recession.

The Dow Jones Industrial Average made a small gain, rising 9.88 points, or 0.03%, to end at 33,743.84. The Nasdaq Composite fell 0.18% to close at 11,313.36, while the S&P 500 fell 0.02% to 4,016.22.

Stocks pared losses during afternoon trading as the Dow rebounded from a drop of more than 460 points. At its lows, the Nasdaq lost 2.34%.

The tech laid bare the brunt of the session’s losses after Microsoft’s lackluster forecast further stoked growth concerns. The software giant last traded flat after falling for most of the session. Boeing ended slightly higher despite a failure in terms of turnover and result.

“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 Adam Sarhan, CEO of 50 Park Investments.

Investors bought stocks early in the period anticipating better-than-expected drawdowns as companies reset and lowered expectations. But reports so far across all sectors have mostly dashed those hopes, as many companies share a bleak outlook, he said.

Investors brace for bigger earnings this week as fears of a recession persist, with You’re here and IBM among companies expected to release numbers after the bell. So far, more than 19% of S&P 500 companies have reported fourth-quarter earnings, with 68% posting stronger-than-expected results, according to FactSet.

This beat rate, however, lags historical trends, according to Nick Raich, CEO of The Earnings Scout. The average fourth-quarter earnings beat rate is 79%, he pointed out in a Friday note.

As of Wednesday’s close, all three major averages are trading higher for the week, with the Nasdaq up 1.55%. The S&P and the Dow are up 1.1%.

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