Disappointing Earnings News Contributing To Sell-Off On Wall Street

Stocks have moved sharply lower during trading on Wednesday, with the major averages adding to the modest losses posted in the previous session. The Nasdaq has shown a particularly steep drop amid weakness among tech stocks.

In recent trading, the Nasdaq and the S&P 500 have fallen to new lows for the session. The Nasdaq is down 426.16 points or 2.4 percent at 17,571.19, the S&P 500 is down 84.25 points or 1.5 percent at 5,471.49 and the Dow is down 293.01 points or 0.7 percent at 40,065.08.

The sell-off on Wall Street comes amid a negative reaction to corporate earnings news from companies like Tesla (TSLA) and Alphabet (GOOGL).

Shares of Tesla have plummeted by 11.4 percent after the electric vehicle maker reported weaker than expected second quarter earnings.

Google parent Alphabet has also slumped by 3.9 percent after reporting second quarter earnings that beat analyst estimates but missing expectations for YouTube advertising revenue.

Shares of Meta Platforms (META) have also tumbled by 3.8 percent after the Facebook parent announced a free version of its Llama artificial intelligence model.

On the other hand, telecom giant AT&T (T) has jumped by 4.3 percent after reporting second quarter earnings in line with estimates and stronger than expected phone subscriber growth.

In U.S. economic news, the Commerce Department released a report unexpectedly showing a continued decrease by new home sales in the U.S. in the month of June.

The report said new home sales fell by 0.6 percent to an annual rate of 617,000 in June after plummeting by 14.9 percent to a revised rate of 621,000 in May.

Economists had expected new home sales to surge by 3.4 percent to a rate of 640,000 from the 619,000 originally reported for the previous month.

With the unexpected decline, new home sales slumped to their lowest level since hitting an annual rate of 611,000 in November 2023.

Sector News

Semiconductor stocks have shown a substantial move to the downside on the day, with the Philadelphia Semiconductor Index plunging by 2.8 percent to its lowest intraday level in well over a month.

Significant weakness is also visible among software stocks, as reflected by the 2.2 percent slump by the Dow Jones U.S. Software Index.

Airline, retail and consumer stocks are also seeing notable weakness, while gold stocks have moved sharply higher amid an increase by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index slumped by 1.1 percent, while China’s Shanghai Composite Index fell by 0.5 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index is down by 0.9 percent, the German DAX Index is down by 0.7 percent and the U.K.’s FTSE 100 Index is down by 0.1 percent.

In the bond market, treasuries are extending the modest upward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.5 basis points at 4.219 percent.