U.S. stock indexes closed lower on Wednesday as chip stocks tumbled and investors awaited a host of corporate earnings. That set the tone for Canada, where the domestic benchmark stock index suffered its seventh decline in eight trading days since notching a record closing high.
Microsoft and Meta Platforms reported earnings after the bell, with both beating quarterly revenue estimates. However, Meta shares were down modestly in post market trading as user numbers were softer-than-expected and it warned of a significant acceleration in its infrastructure expenses next year.
Shares of Alphabet, the first of the five “Magnificent Seven” megacap stocks that reported results this week, rose 2.8% in regular trading after the company late Tuesday beat expectations for third-quarter revenue and profit.
Alphabet helped to offset falling chip stocks, weighed by dour forecasts from Advanced Micro Devices and Qorvo , which fell 10.6% and 27.3%, respectively.
Meanwhile, shares of Super Micro Computer plunged 32.6% after Ernst & Young resigned as the company’s accountant. Nvidia slipped 1.4%.
The information technology sector was the biggest sectoral decliner on Wall Street, falling 1.34%, while Alphabet’s gains lifted the communication services sector.
“Qorvo, Advanced Micro and Super Micro - those are three pretty big moves that are causing a little bit of angst and taking some of the bloom off the rose from the stellar print from Google [Tuesday] night,” said Michael James, managing director of equity trading at Wedbush Securities. “The clear laser focus is going to be on the stock specific reports and guides,” James said.
In economic data, U.S. gross domestic product increased at a 2.8% annualized rate, according to the Commerce Department’s advance estimate of third-quarter GDP, slightly below economists’ forecast of 3.0% growth. A separate report showed U.S. private payrolls growth surged by a higher-than-expected 233,000 jobs in October.
The neck-and-neck race between U.S. presidential candidates Kamala Harris and Donald Trump was also at the top of investors’ minds ahead of the Nov. 5 election.
The Dow Jones Industrial Average fell 91.51 points, or 0.22%, to 42,141.54, the S&P 500 lost 19.25 points, or 0.33%, to 5,813.67 and the Nasdaq Composite lost 104.82 points, or 0.56%, to 18,607.93.
The S&P/TSX composite index ended down 54.76 points, or 0.2%, at 24,507.79.
“Canada is following global sentiment which is a little bit weaker,” said Ben Jang, a portfolio manager at Nicola Wealth. “It’s investors taking profits where they can.”
The materials sector fell 1% even as the price of gold extended its record-setting run. The sector has advanced 34% since the start of the year.
Technology was also a drag, falling 0.8%. Industrials ended 0.4% lower.
Not all sectors lost ground in Toronto. Consumer staples rose 1.3%, while energy added 0.3% as the price of oil settled 2.1% higher at US$68.61 a barrel.
In stock moves, Secure Energy Services Inc jumped 9.9% after the company reported third-quarter results.
In the U.S., Eli Lilly fell 6.2% after missing sales estimates for its popular weight-loss and diabetes drugs.
Starbucks reported earnings after the close showing a drop in quarterly sales as global demand suffers.
Advancing issues outnumbered decliners by a 1.01-to-1 ratio on the NYSE. There were 210 new highs and 52 new lows on the NYSE. The S&P 500 posted 24 new 52-week highs and five new lows, while the Nasdaq Composite recorded 126 new highs and 98 new lows.
Reuters, Globe staff