Wall Street tumbles on worries about corporate profits
NEW YORK (AP) — Wall Street is weakening Wednesday on worries about corporate profits following a mixed set of earnings reports and forecasts from Microsoft and others.
The S&P 500 was 1.4% lower in early trading, on pace for a second step down after reaching its highest level in seven weeks on Monday. The Dow Jones Industrial Average was down 314 points, or 0.9%, at 33,423, as of 9:55 a.m. Eastern time, and the Nasdaq composite was 2.1% lower.
Microsoft was helping to lead the way lower with a 4.4% drop after it reported weaker growth in revenue for the last three months of 2022 than expected. Perhaps more importantly, it gave a forecast for upcoming results that fell short of some analysts’ expectations. They pointed in particular to expectations for slowing growth in its Azure cloud business.
Microsoft is one of Wall Street’s dominant stocks because it’s one of the largest, which gives its stock movements more sway over the S&P 500 than others. Not only that, analysts say Microsoft offers one of the best windows into the strength of corporate spending because of how many businesses use its software and services.
Worries are rising that corporate profits are set to shrink broadly because of a slowing economy and still-rising costs amid high inflation. Analysts are forecasting S&P 500 companies over the next couple weeks will report their first drop in quarterly earnings per share since the pandemic was crushing the economy in 2020.
Intuitive Surgical fell 6.9%, and Nasdaq Inc., the company behind the Nasdaq Stock Market, fell 7.1% for two of the biggest losses in the S&P 500 after both reported weaker quarterly results than analysts expected.
On the winning side was AT&T, which rose 5.1% after reporting stronger profit than forecast.
The level...