By CCN.com: U.S. stocks swung lower on Wednesday, reversing a strong start to the day as concerns over trade and global economic growth offset solid corporate earnings.
All of Wall Street’s major indexes fell by late morning, with the Dow Jones Industrial Average giving up triple-digit gains. The blue-chip index rose 296 points after the open, which mirrored a positive pre-market session for Dow futures. At the time of writing, the Dow was down 33 points, or 0.1%, at 24,371.36.
The broad S&P 500 Index also reversed gains, falling 0.7% to 2,614.23. Gains were largely contained to consumer staples and utilities, two sectors known for their defensive posture.
A weak performance in communication services weighed on the Nasdaq Composite Index, which fell 1% to 6,955.14.
U.S. stocks are coming off their biggest one-day loss since Jan. 3, as fears of a slowing Chinese economy weighed on investors’ sentiment. China’s economy grew 6.6% annually in 2018, the slowest since 1990. The International Monetary Fund (IMF) on Monday lowered its outlook on global growth this year and next.
The Tuesday sell-off was accompanied by a sharp rise in volatility, as the CBOE VIX rose nearly 17% to 20.80. On Wednesday, VIX rose more than 3%.
Strong corporate earnings and positive guidance lifted markets at the start of Wednesday’s session. Dow blue-chip IBM Corp (IBM) surged after the company reported better than expected results and signaled that fast-growing businesses would propel the company’s growth this year.
The tech juggernaut reported per-share earnings of $4.87 on revenue of $21.76 billion. Analysts had forecast profits of $4.82 per share on revenue of $21.76 billion.
Fourth-quarter earnings from Comcast Corporation (CMCSA) were also better than expected thanks to strong performances from its NBCUniversal media unit and internet business. The firm reported per-share earnings of 64 cents on revenue of $27.84 billion. The median estimate was for 62 cents per share on sales of $27.55 billion.
Wall Street is gearing up for another solid quarter of earnings. As of Friday, three-quarters (76%) of S&P 500 companies had reported better than expected profit results and 56% posted revenue surprises, according to FactSet. That data set is based on 11% of S&P 500 companies that have reported earnings so far.
Featured image courtesy of Shutterstock. Chart via TradingView.
Last modified (UTC): January 23, 2019 12:20 PM