Wall Street down, Microsoft technology weighed down

(New York) The New York Stock Exchange opened lower on Wednesday as it was dragged into the red by the technology sector, weighed down by Microsoft’s gloomy 2023 forecast.

The Dow Jones index fell 0.63%, the tech-heavy NASDAQ lost 1.52% and the broader S&P 500 index fell 0.99% around 9:45 a.m. Eastern Time.

The day before, the New York indexes had closed after a volley of scattered company results.

The Dow Jones was up 0.31% to 33,733.96, the NASDAQ was down 0.27% to 11,334.27 and the broader S&P 500 index was almost flat (-0.07%) at 4016.95 points.

After better-than-expected quarterly results, IT giant Microsoft dragged the market down after gloomy forecasts for demand this year, suggesting a broader slowdown in activity around the world. The stock was down 4.01% as of 9:40 a.m. Eastern Time.

In a conference call with analysts, the company said it expects revenue of between $50.5 billion and $51.5 billion for the current quarter, below what the market was expecting.

Microsoft also expects weaker demand than last year for its personal computer business, such as its Windows operating system.

In particular, the growth of remote computing (cloud) is likely to continue to falter.

Those prospects of a slowdown in cloud activity also caused Amazon, Microsoft’s competitor in that market, to shed nearly 3%, noted Briefing analyst Patrick O’Hare.

Mega-cap Alphabet, parent company of Google, also fell 1.99% after being down almost 2% the day before.

The US Department of Justice said on Tuesday it is suing the internet giant for “monopolizing” the online advertising market.

Another heavyweight weighed on the market, Dow Jones-listed aircraft maker Boeing returned 1.12% after announcing disappointing quarterly and full-year results before the market opened.

The planemaker remained in the red for the fourth straight year, with a net loss of $4.9 billion in 2022, despite a 7% increase in revenue to $66.6 billion.

The group is still struggling with ongoing problems in its supply chain and recruitment, but on Wednesday maintained its guidance for 2023.

Overall, “investors were concerned about security valuation issues and the idea that the stock market may have run too far ahead of its January rally,” O’Hare said.

Other companies also published disappointing results or forecasts, which further clouded investor sentiment.

This applied in particular to Texas Instrument (-2.21%), the bank Capital One Financial (+0.36%) and the American hygiene products group Kimberly-Clark (-3.52%).

The quarterly sales of the Texas manufacturer of Kleenex tissues and Cottonelle toilet paper suffered from exchange rate influences and fell slightly short of forecasts.

For 2023, the group is forecasting stagnating sales or, at best, an increase of 2%.

In the bond market, two-year Treasury bill rates, which depend on the immediate economic situation, fell sharply to 4.15% from 4.21% the previous day.

After the close, results were expected from Tesla (-1.54% at 9:40am EST) and IBM (-1.06%).

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