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Stock market indexes extended losses midday Wednesday, trading at session lows.
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By midday on Wall Street, the Nasdaq composite was down 1.5%, and the S&P 500 was down 1%.
Alphabet ( GOOGL ), a major component of both indexes, sold off roughly 8% in large volume. The Google parent is on track for its worst day since Oct. 26, 2022, when it fell 9.1%, according to Dow Jones market data. Alphabet’s new chatbot gave the wrong answer at a critical moment, leading to today’s stock crash.
The Dow Jones Industrial Average lost 0.6%, while the Russell 2000 fell 1.4%.
On Tuesday, stocks ended lower after Fed Chairman Jerome Powell downplayed recent inflation and interest rate hikes. Although Powell’s tone remained unchanged, investors saw reasons to be bullish.
But the tone was more hawkish in this morning’s Fed comments. John Williams, president of the New York Fed, said the Federal Reserve may need to pursue years of restrictive monetary policy if inflation is to return to pre-pandemic levels.
The 10-year Treasury yield rose 1 basis point to 3.69%, extending its rebound above its 20-day moving average.
Volume fell on the NYSE but rose on the Nasdaq compared to the same period on Tuesday.
The Innovator IBD 50 ETF ( FFTY ) was worse, down 1.8%. Perion Networks ( PERI ) took a walk shy of the IBD 50’s best performance, down more than 10 percent. The digital ad service provider beat Q4 estimates and released online guidance this morning.
Drivers on earnings
Earnings reports continue to influence stock market trading.
Chipotle Mexican Grill ( CMG ) fell 5.7% on heavy volume but held above the 1,638.43 buy point from last week’s open. The fast-casual restaurant chain is set to end its six-day winning streak. Chipotle missed fourth-quarter sales, profit and same-store sales estimates.
Capri Holdings ( CPRI ) tumbled a massive 26%, below its 50-day moving average. The parent company of fashion brands Versace, Michael Kors and Jimmy Choo missed its December-quarter earnings outlook, giving a weak outlook. Capri’s plunge also took the stock 17 percent below a 60.71 buy point, a sell signal.
Vishay Intertechnology ( VSH ) sold off 13 percent after the electronic components maker reported fourth-quarter earnings and sales below analysts’ views. The stock has fallen more than 7% from the 23.49 buy point and is below the 50-day moving average – both sell signals.
On the plus side, Uber (UBER) Shares of the ride-hailing company rose to a 10-month high after the company beat fourth-quarter estimates. The stock gained midday. Shares of Uber have extended a 31.30 buy point since Feb. 1.
Fortinet ( FTNT ) has also jumped more than 12% on heavy volume as the stock made a significant move above its 200-day moving average. Fortinet is having its best day since May 7, 2020 with a 21% rally.
The cyber security company had a bumper fourth quarter. Late Tuesday, it reported better-than-expected Q4 sales, earnings and billings guidance.
Stock market offers and updates
A further deal sparked the stock market on Wednesday.
CVS Health (CVS) has confirmed that it has agreed to acquire Oak Street Health ( OSH ) at $39 per share, or about $10.6 billion, including debt. Oak Street operates primary care centers for Medicare patients and targets underserved communities.
CVS stock rose 4 percent after hitting an October 2021 low earlier this week. Oak Street opened Tuesday up 4% by midday after The Wall Street Journal first reported the deal.
TripAdvisor (TRIP) is in a buy zone moving back above 24.78 buy points to 26.02 in active trading. Bank of America upgraded its stock to Buy from Low and raised its price target from 19 to 38.
Activision Blizzard ( ATVI ) fell more than 2% in volatile trading. UK regulators raised objections. Microsoft‘s ( MSFT ) proposed a $75 billion purchase of the video game giant. MSFT shares rose 0.7 percent.
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