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Stocks fell Wednesday after underwhelming reports from two mega-cap tech companies dented investor sentiment, putting the Nasdaq Composite on track for its worst day since October.
The Dow Jones Industrials shrank 340.64 points to 40,017.45.
The S&P 500 index subtracted 99.3 points, or 1.8%, to 5,456.44.
The NASDAQ tumbled 526.95 points, or 2.9%, to 17,623.84
Shares of Google parent company Alphabet fell 5%. Although Alphabet reported a top and bottom line beat, YouTube advertising revenue fell below the consensus estimate. Meanwhile, Tesla shares declined 10% on weaker-than-expected results and a 7% year-over-year drop in auto revenue.
Other mega-cap tech stocks fell in sympathy with Alphabet and Tesla. Nvidia and Meta Platforms lost 5% each, while Microsoft slid 3%.
Those reports mark investors’ first look at how mega-cap companies fared during the second quarter. Reports from these names are of special interest to Wall Street as this small cohort is responsible for the bulk of this year’s gains.
So far, though, the earnings season overall is off to a strong start. More than 25% of S&P 500 companies have reported their second-quarter earnings, with roughly 80% of them topping expectations.
Adding to investor concerns on Wednesday morning was weaker-than-expected U.S. manufacturing data. The U.S. PMI flash manufacturing output index fell to 49.5 in July, unexpectedly slipping into contraction territory as new orders, production and inventories declined.
Economists had forecast a reading of 51.5, according to Dow Jones.
Prices for the 10-year Treasury gained ground, lowering yields to 4.23% from Tuesday’s 4.25%. Treasury prices and yields move in opposite directions.
Oil prices recovered 90 cents at $77.86 U.S. a barrel.
Gold prices jumped $19.50 to $2,423.10.
