Dow rallies over 200 points to gain for a fourth day as investors shrug off disappointing tech earnings
The Dow Jones Industrial Average and S&P 500 rose for a fourth day on Wednesday as traders shrugged off disappointing earnings from tech giants Microsoft and Alphabet.
The 30-stock Dow Jones traded up 282 points, or 0.9%, as Visa shares boosted the index on strong quarterly numbers. The S&P 500 climbed 0.5% after falling earlier in the session. The Nasdaq Composite lagged, trading down 0.3%
Tuesday’s tech earnings sent the market lower earlier in the day, but investors looked to other companies that were beating expectations and cutting bond yields for hope.
“Interest rates have really started to bite in terms of the reversal of the inflation story,” said Jamie Cox, managing partner of Harris Financial Group. “It’s really important for the markets.”
Shares of Alphabet, Google’s parent company, fell 6.4% after the tech giant missed expectations for higher and lower results. Alphabet also reported a decline in YouTube ad revenue, prompting investors to ponder the prospects of other tech companies that rely on ad spend.
Meanwhile, Microsoft fell about 6% after the tech giant reported weaker-than-expected cloud revenue in its latest quarterly results, despite higher earnings and revenue estimates. The company also released revenue guidance for the current quarter that fell short of expectations.
In other earnings news, Harley-Davidson shares rose 6.7% after the motorcycle maker said it beat expectations before the bell. Boeing lost 2.9% after the planemaker reported a quarterly loss and missed revenue expectations.
“Investors were probably a little surprised by the negative advice Microsoft offered,” said Sam Stovall, chief investment strategist at CFRA, while noting that others like Coca-Cola and UPS are doing better. “I think investors are feeling a bit better about blue chip, large-cap stocks.”
Major averages entered Wednesday’s session on a three-day winning streak.