April 24 (Reuters) – The Nasdaq led Wall Street losses on Monday as investors await results and key economic data from this week’s megacap companies.
Tesla (TSLA.O) fell 3.4%, weighing on consumer discretionary stocks (.SPLRCD) after automakers raised their 2023 capital spending forecasts and ramped up production.
Alphabet (GOOGL.O), Microsoft (MSFT.O), Amazon.com (AMZN.O) and Meta Platforms (META.O) account for more than 14% of the benchmark S&P 500 value ( .SPX) will report results this week.
The rally in these stocks has underpinned Wall Street this year, with investors waiting to see if the rally continues amid a bleak economic outlook.
“It’s a good or bad week for (tech) stocks,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. There is,” he said.
U.S. stocks were largely stable leading into the start of earnings season, with big banks outperforming expectations and fears of spillovers from the banking crisis in March easing.
Of the 90 S&P 500 companies that have reported first-quarter results so far, nearly 77% beat analyst earnings estimates, according to Refinitiv IBES data. The long term average beat rate is 66%.
Earnings forecasts have also improved slightly, with analysts expecting a 4.7% quarterly earnings contraction compared to a 5.1% decline forecast in early April.
Data due out this week include early readings of US GDP in the first quarter, the Personal Consumer Expenditure Index (PCE) in March, and consumer confidence in April.
Various economic data last week cemented bets on the Fed’s 25 basis point rate hike in May, with financial market traders pricing in a 92% chance of such a move, according to CME Group’s Fedwatch tool. is.
Most Fed policymakers last week acknowledged that the central bank has more to do to keep inflation down before entering a blackout period until the next policy meeting.
Treasury yields fell on recent signs of slowing inflation and economic activity, but investors appeared increasingly concerned about a potential conflict over the U.S. debt ceiling.
U.S. House Speaker Kevin McCarthy said the House will vote on his spending and debt bills this week amid lingering concerns that the U.S. government could hit the debt ceiling sooner than expected.
At 11:44 a.m. ET, the Dow Jones Industrial Average (.DJI) fell 52.81 points (0.16%) to 33,756.15 and the S&P 500 (.SPX) fell 12.52 points (0.30%) to 4,121.00. The Nasdaq Composite (.IXIC) fell 98.14 points (0.81%) to 11,974.32.
Defensive sectors Healthcare (.SPXHC), Utilities (.SPLRCU) and Consumer Goods (.SPLRCS) saw rare gains.
First Republic Bank (FRC.N) rose 6.3% ahead of quarterly results. The local bank’s shares have fallen 88% this year in the wake of the US banking crisis.
Losers outnumbered gainers by 1.05 to 1 on the NYSE and 1.75 to 1 on the Nasdaq.
The S&P index posted 17 new highs and two new lows in 52 weeks, while the Nasdaq posted 52 new highs and 139 new lows.
Reporting by Surti Shankar, Bengaluru Editing by Vinay Dwivedi
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