Tech heavy Nasdaq index underperformed S&P 500 and Dow Jones Industrial Average on Monday as concerns about earnings by tech heavyweights weighed on investors' sentiment.
Elon Musk-backed Tesla Inc closed 1.5 per cent lower after the automaker raised its 2023 capital expenditure forecast to ramp up output, making it the second biggest drag on the benchmark S&P 500 behind Microsoft Corp, news agency Reuters reported.
Microsoft was under pressure on Monday as investors appeared anxious about its results, due on Tuesday. Another heavyweight laggard was Amazon.com Inc, which is on deck to report this week along with Alphabet Inc and Meta Platforms Inc.
A rally in these stocks supported Wall Street this year, so investors are worried about whether the gains can continue given the gloomy economic outlook, Reuters report said.
"People are a little tentative that the outperformance may not continue in earnings season, which thus far has been quite a bit better than expected. Granted the bar was low," Reuters quoted Randy Frederick, managing director, trading and derivatives at Charles Schwab as saying.
The Dow Jones Industrial Average rose 66 points to 33,875.4 while the S&P 500 gained 3.52 points to close at 4,137.04 and Nasdaq Composite dropped 35 points to settle at 12,037.20.
The S&P 500 posted 21 new 52-week highs and two new lows; the Nasdaq Composite recorded 64 new highs and 201 new lows.
Coca-Cola slipped 0.2 per cent after it reported stronger-than-expected profit for the first quarter but refrained from raising forecasts for sales and other measures for the full year. It was the only company in the S&P 500 to report Monday morning, but more than 170 others are scheduled to follow it this week.
The question is whether they can top the low bar that Wall Street has set for them, and what CEOs say about their prospects for profits later this year. Analysts expect S&P 500 companies to report their worst drop in earnings since the spring of 2020, when the pandemic paralyzed the economy.
Fox fell 2.9 per cent after it said the popular but polarizing prime-time host Tucker Carlson is leaving Fox News. The move comes less than a week after the company reached a $787.5 million settlement over charges that it promoted lies about Dominion Voting Systems through its 2020 election coverage.
Bed Bath & Beyond was another loser, dropping 35.7 per cent to 19 cents after filing for bankruptcy protection. The struggling retailer’s stock has been on a wild ride as investors bet on whether it could successfully turn around its operations.
(With AP inputs)
