Nasdaq closes flat at its 2022 low as a comeback attempt Wednesday fails
U.S. stocks rose in volatile trading Wednesday, a day after the Nasdaq Composite posted its worst daily loss since 2020, attempting to rebound from a tech-led sell-off in April.
The Nasdaq Composite gained 0.1%, after being up 1.7% at its highs and touching a new 2022 low earlier in the session. The Dow Jones Industrial Average rose about 160 points, or 0.5%. The S&P 500 advanced 0.4%.
Strong corporate earnings results boosted investor sentiment after Tuesday’s big sell-off.
“The Nasdaq we saw hit some support levels on the bottom. … You have some people step in and start buying and that’s why we see the market up,” Victoria Fernandez, chief market strategist at Crossmark Global Investments, said. “It’s been a pretty good earnings season and that is supportive for the equity market.”
Microsoft boosted the major averages after strong earnings results. Shares jumped more than 5% after a better-than-expected quarterly report and optimistic forward revenue guidance.
Visa also rose more than 6%, the top gainer on the Dow, after the company’s quarterly results topped analyst estimates on the top and bottom limes. Solar company Enphase Energy surged 5% and was one of the biggest winners on the S&P 500 after an earnings beat.
“We’re trying to find a place of stability,” Kari Firestone, chairman and CEO of Aureus Asset Management, told CNBC’s “Squawk Box.” “We need to see a few more names come in with really strong, reliable and sustainable earnings so investors can get back on board.”
Facebook parent Meta is set to report earnings Wednesday after the bell, with Apple and Amazon reporting earnings Thursday. Meta fell more than 4%, and Apple and Amazon were both lower.
Investors will be watching to see if tech companies’ results prove the intense selling in April has been misplaced.
“We remain cautious on rallies here,” BTIG’s Jonathan Krinsky said in a note to clients. “There still hasn’t been a full-scale washout, in our view, and trends remain to the downside. This means small rallies don’t do much other than alleviate short-term oversold conditions.”
On the downside, Google parent Alphabet fell about 4% after the tech giant’s earnings results missed consensus estimates. Management warned on the conference call of another potentially weak quarter ahead.
Boeing also saw shares drop more than 9% after an earnings miss, the biggest laggard on the S&P 500 and the Dow.
The tech-heavy Nasdaq Composite is in bear market territory, sitting now roughly 23% below its high. The S&P 500 is more than 13% off its record and closed Tuesday below a key support level of 4200.
In April, the S&P 500 is down around 7%. The Nasdaq has lost more than 11%. The Dow has declined around 3%.
“The confluence of persistent inflation, Fed tightening, the war in Ukraine, and China’s zero-Covid policy lockdowns has manifested in tenacious headwinds for investors in April,” Art Hogan, National Securities chief market strategist, said.