Major Averages Close Mixed As Traders Weigh Tech Earnings Against Banking Concerns

(RTTNews) - Following the sell-off seen in the previous session, the major U.S. stock indexes turned in a mixed performance during trading on Wednesday. While the tech-heavy Nasdaq bounced off its lowest closing level in almost a month, the Dow and the S&P 500 saw further downside.

The Nasdaq pulled back well off its best levels of the day but still closed up 55.19 points or 0.5 percent at 11,854.35. Meanwhile, the Dow slid 228.96 points or 0.7 percent to 33,301.87, and the S&P 500 fell 15.64 points or 0.4 percent to 4,055.99.

The mixed performance on Wall Street came as traders weighed upbeat tech earnings against renewed concerns about turmoil in the banking sector.

The rebound by the Nasdaq largely reflected a positive reaction to earnings news from Microsoft (MSFT), with the software giant soaring by 7.2 percent to its best closing level in a year.

The spike by Microsoft came after the company reported fiscal third quarter results that beat expectations on both the top and bottom lines and provided upbeat revenue guidance for the current quarter.

Google parent Alphabet (GOOGL) also saw early strength but ended the day slightly lower after reporting better than expected first quarter results and announcing a $70 billion stock buyback.

On the other hand, shares of First Republic (FRC) extended the steep drop seen in the previous session, which came after the regional bank reported a loss of more than $100 billion in deposits in the first quarter, renewing concerns about turmoil in the banking sector.

"First Republic is fighting for survival as advisors try to get the big banks to give it another helping hand," said Edward Moya, senior market analyst at OANDA.

He added, "First Republic's fate seems doomed as no bank can survive after losing over half their deposits, so the focus will be on which midsized bank is vulnerable to a severe deposit run."

In U.S. economic news, the Commerce Department released a report showing new orders for U.S. manufactured durable goods surged by much more than expected in March amid a substantial rebound in orders for transportation equipment.

The report said durable goods orders spiked by 3.2 percent in March after tumbling by a revised 1.2 percent in February.

Economists had expected durable goods orders to climb by 0.8 percent compared to the 1.0 percent slump that had been reported for the previous month.

Excluding the jump in orders for transportation equipment, durable goods orders rose by 0.3 percent in March after falling by 0.3 percent in February. Ex-transportation orders were expected to dip by 0.2 percent.

Sector News

Transportation stocks extended the sell-off seen during Tuesday's session, dragging the Dow Jones Transportation Average down by 3.6 percent to its lowest closing level in well over three-months.

Considerable weakness also emerged among interest rate-sensitive utilities stocks, as reflected by the 2.1 percent slump by the Dow Jones Utility Average. The index pulled back off a more than two-month closing high.

Pharmaceutical stocks also showed a significant move to the downside on the day, with the NYSE Arca Pharmaceutical Index falling by 1.9 percent after ending Tuesday's trading at a record closing high.

Housing, healthcare and natural gas stocks also came under pressure over the course of the session, while software stocks held on to strong gains, resulting in a 4.4 percent surge by the Dow Jones U.S. Software Index.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index slid by 0.7 percent, while South Korea's Kospi edged down by 0.2 percent and China's Shanghai Composite Index closed just below the unchanged line.

The major European markets also moved to the downside on the day. While the French CAC 40 Index slumped by 0.9 percent, the German DAX Index and the U.K.'s FTSE 100 Index both fell by 0.5 percent.

In the bond market, treasuries came under pressure over the course of the session after seeing early volatility. Currently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 3.6 basis points to 3.432 percent.

Looking Ahead

Earnings news is likely to remain in focus on Thursday, with Meta Platforms (META), eBay (EBAY) and Mattel (MAT) among the companies releasing their quarterly results after the close of today's trading.

American Airlines (AAL), Caterpillar (CAT), Comcast (CMCSA), Hasbro (HAS), Hershey (HSY), Honeywell (HON) and Merck (MRK) are also among the companies due to report their results before the start of trading on Thursday.

A preliminary reading on first quarter GDP is also likely to attract attention along with reports on weekly jobless claims and pending home sales.