Stock market indexes deepened losses at midday Wednesday, trading at session lows.
At midday on Wall Street, the Nasdaq composite was down 1.5%, and the S&P 500 was off 1%.
Alphabet, a major piece of both indexes, sold off nearly 8% in big volume. The parent of Google 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 an inaccurate answer at a crucial time, triggering today's stock drop.
The Dow Jones Industrial Average lost 0.6% while the Russell 2000 fell 1.4%.
On Tuesday, stocks eventually rallied into the close after digesting Fed Chair Jerome Powell's latest take on inflation and interest rates. Although Powell's tone didn't change, investors saw reasons to be bullish.
But the tone was more hawkish in this morning's Fed comments. New York Fed President John Williams said the Federal Reserve may need to stick with a restrictive monetary policy for years if it's going to take inflation back to pre-pandemic levels.
The 10-year Treasury yield was up 1 basis point to 3.69%, extending a rebound from its 20-day moving average.
Volume fell on the NYSE but rose on the Nasdaq compared with the same time on Tuesday.
The Innovator IBD 50 ETF worsened to a 1.8% drop. Perion Networks took the walk of shame as IBD 50's worst performer, down more than 10%. The digital-advertising services provider beat Q4 estimates and posted in-line guidance this morning.
Futures Rise, Dow Giant Jumps; Why This Pullback Still Looks Healthy
Movers On Earnings
Earnings reports continue to influence stock market trading.
Chipotle Mexican Grill fell 5.7% in heavy volume but held above the 1,638.43 buy point of last week's breakout. The fast-casual restaurant chain is set to end a six-day win streak. Chipotle missed fourth-quarter sales, profit and same-store sales expectations.
Capri Holdings plummeted 26% in huge volume, gapping below its 50-day moving average. The parent company of the Versace, Michael Kors and Jimmy Choo fashion brands missed December-quarter earnings views and gave a weak outlook. Capri's plunge also took the stock 17% below its 60.71 buy point, a sell signal.
Vishay Intertechnology sold off 13% after the electronic-components maker reported fourth-quarter earnings and sales below analysts' views. The stock has fallen more than 7% from its 23.49 buy point and tumbled below the 50-day moving average — both sell signals.
On the plus side, Uber gapped up to a 10-month high after the ride-share company beat fourth-quarter estimates. The stock pared gains at midday. Uber shares are extended from the 31.30 buy point of a breakout Feb. 1.
Fortinet also gapped up, jumping more than 12% in heavy volume as the stock made a decisive move above the 200-day moving average. Fortinet is having its best day since a 21% rally on May 7, 2020.
The cybersecurity company had a bountiful fourth quarter. Late Tuesday, it reported Q4 sales, earnings and billings guidance that exceeded expectations.
Stock Market Deals And Upgrades
More deal-making stirred the stock market Wednesday.
CVS Health confirmed it agreed to acquire Oak Street Health in a deal valued 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% after falling to an October 2021 low earlier this week. Oak Street gapped up Tuesday, after the Wall Street Journal first reported the deal, and added 4% at midday.
TripAdvisor climbed back above the 24.78 buy point in active trading and is in a buy zone that goes to 26.02. Bank of America upgraded the travel stock to buy from underperform and doubled the price target from 19 to 38.
Activision Blizzard fell more than 2% as it extended a pattern of volatile trading. U.K. regulators raised objections to Microsoft's proposed $75 billion acquisition of the video gaming giant. MSFT stock pared gains to 0.7%.
