Wall St struggles for direction ahead of mega cap earnings

By Abigail Summerville

(Reuters) -U.S. stock indexes were mixed on Wednesday, with the Dow gaining and the tech-heavy Nasdaq falling, as investors assessed a host of corporate earnings.

Shares of Alphabet (NASDAQ:GOOGL ), the first of the five "Magnificent Seven" megacap stocks that report results this week, rose 4.1% after the company beat expectations for third-quarter revenue and profit on strength in its cloud business and YouTube ad sales.

That helped to offset falling chip stocks, weighed by dour forecasts from Advanced Micro Devices (NASDAQ:AMD ) and Qorvo (NASDAQ:QRVO ), which lost 9.9% and 26.5%, respectively.

Meanwhile, shares of Super Micro Computer (NASDAQ:SMCI ) plunged 32.7% after Ernst & Young resigned as the company's accountant. Nvidia (NASDAQ:NVDA ) was down 1.2%.

The Information Technology sector was the biggest sectoral decliner, 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 last 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.

By 2:20 p.m. ET (1820 GMT), the Dow Jones Industrial Average rose 79.44 points, or 0.19%, to 42,312.49, the S&P 500 lost 0.21 points, or 0.00%, to 5,832.79 and the Nasdaq Composite lost 17.40 points, or 0.09%, to 18,695.35.

In economic data, the 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.

Traders anticipate a 25-basis-point rate cut in the Federal Reserve's November and December meetings.

Megacaps Microsoft (NASDAQ:MSFT ) and Meta Platforms (NASDAQ:META ) rose ahead of their scheduled results after the bell, which are expected to provide insight into whether heavy AI investment is translating into better company performances.

Starbucks (NASDAQ:SBUX ) is also set to report earnings after the close.

Eli Lilly (NYSE:LLY ) lost 8.8% after missing sales estimates for its popular weight-loss and diabetes drugs.



Advancing issues outnumbered decliners by a 1.44-to-1 ratio on the NYSE, and by a 1.09-to-1 ratio on the Nasdaq.

The S&P 500 posted 23 new 52-week highs and five new lows while the Nasdaq Composite recorded 117 new highs and 75 new lows.

Source: Investing.com