Nasdaq Pulls Back Sharply But Dow Posting Modest Gain

Stocks have moved mostly lower in morning trading on Wednesday, giving back ground following the advance seen in the previous session. The tech-heavy Nasdaq has shown a notable move to the downside on the day.

Currently, the Nasdaq is off its worst levels but still down 156.94 points or 1.2 percent at 12,982.93. The S&P 500 is also down 23.64 points or 0.6 percent at 4,224.04, while the narrower Dow has bucked the downtrend and inched up 58.54 points or 0.2 percent to 33,199.81.

The sharp pullback by the Nasdaq partly reflects a negative reaction to quarterly results from Alphabet (GOOGL), with Google parent plunging by 8.7 percent.

Shares of Google are under pressure after the company reported third quarter earnings that exceeded estimates but weaker than expected revenue from its cloud business.

A renewed increase by treasury yields is also weighing on the markets, with yields seeing further upside after the Commerce Department released a report showing a substantial rebound in new home sales in the month of September.

The Commerce Department said new home sales soared by 12.3 percent to an annual rate of 759,000 in September after plunging by 8.2 percent to a revised rate of 676,000 in August.

Economists had expected new home sales to climb by 0.7 percent to an annual rate of 680,000 from the 675,000 originally reported for the previous month.

With the much bigger than expected increase, new home sales reached their highest annual rate since hitting 773,000 in February 2022.

Meanwhile, the uptick by the Dow is partly due to a strong gain by shares of Microsoft (MSFT) , with the software giant jumping by 3.0 percent after reporting better than expected fiscal first quarter results.

Fellow Dow component Visa (V) has also moved to the upside after reporting fiscal fourth quarter results that exceeded estimates and raising its dividend.

Sector News

Semiconductor stocks have shown a significant move to the downside on the day, dragging the Philadelphia Semiconductor Index down by 2.1 percent. The index is on pace to end the session at a five-month closing low.

Chipmaker Texas Instruments (TXN) is posting a steep loss after reporting mixed third quarter results and providing disappointing fourth quarter guidance.

Considerable weakness is also visible among biotechnology stocks, with the NYSE Arca Biotechnology Index slumping by 1.9 percent to its lowest intraday level in a year.

Transportation, oil service and brokerage stocks are also seeing notable weakness, while software stocks have moved to the upside on the upbeat results from Microsoft.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan’s Nikkei 225 Index advanced by 0.7 percent, while China’s Shanghai Composite Index climbed by 0.4 percent.

Meanwhile, the major European markets are turning in a lackluster performance on the day. While the German DAX Index is down by 0.1 percent, the French CAC 40 Index is just above the unchanged line and the U.K.’s FTSE 100 Index is up by 0.2 percent.

In the bond market, treasuries came under pressure after ending the previous session nearly unchanged. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.0 basis points at 4.910 percent.