The stock market closed lower Wednesday after it's 3-1/2-day rally came to a halt as the tech-heavy Nasdaq plunged on disappointing earnings and forecasts from Alphabet and Microsoft.
The Nasdaq composite closed 2% lower, and the S&P 500 declined 0.7%. The Dow Jones Industrial Average edged up 0.03%. The small-cap Russell 2000 also gained, up 0.5%.
Volume rose on the Nasdaq and the NYSE vs. the same time on Tuesday, according to early data.
Meanwhile, the yield on the benchmark 10-year Treasury note continued to slide, dropping 8 basis points to 4.02%.
U.S. crude oil rose 3.3% to $88.15 per barrel.
U.S. Dollar Slides As Investors Await Fed Rate Hike
New home sales fell to 603,000 in September, better than economists expected. The U.S. dollar futures index plunged another 1% on Wednesday to below 110.
"The U.S. dollar's near parabolic rise against major currencies has eased as data releases, including manufacturing, housing, and even the seemingly stubborn labor market, suggest the economy is slowing in response to higher interest rates," said Quincy Krosby, Chief Global Strategist for LPL Financial.
A rising dollar has hurt U.S. exporters this year, and an easing dollar could benefit some U.S. companies whose products and services sell abroad. A stronger dollar "has become a major headwind for S&P 500 multinationals, especially amid a backdrop of weaker global demand," Krosby said.
Meanwhile, the Federal Reserve's meeting next week is expected to result in another 0.75% hike in the federal funds rate. The probability of a 75 basis point rate increase is 89.3%, according to the CBOE FedWatch tool.
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The S&P Communications Select Sector ETF and the S&P Technology Sector ETF were the worst performers of the 11 S&P sectors, down 3.1% and 2.2%, respectively.
Nasdaq Slides As Tech Sector Falls On Earnings
The stock market tanked after disappointing third-quarter results from Alphabet, sending shares of the Google parent down 9.1%. A weak outlook from Microsoft also triggered the slide, dropping the software and cloud giant 7.7%.
Microsoft and Alphabet, combining the latter's class A and class C shares, represent about 20% of the Nasdaq's total weighting and more than 9% of the S&P 500 index.
Netflix stock jumped 2.6% Wednesday after a Wall Street analyst changed his stance on the internet television network from bearish to bullish. Pivotal Research Group analyst Jeffrey Wlodarczak raised his rating on Netflix to buy from sell. He also jacked up his price target to a Street-high 375, from 200.
Wingstop soared 15.3% Wednesday after the company reported third-quarter earnings that easily beat top and bottom-line analyst estimates. The restaurant chain soared past the 148.94 buy point of a consolidation in heavy trading and is already extended. The pattern may also be interpreted as a shorter double bottom with a 142.03 buy point.
ADM broke out above its 92.36 buy point on strong earnings. ADM is in buy range to 96.98.
Owens Corning fell 4.7% after the building construction company reported $3.57 EPS for the quarter, topping analysts' consensus estimates but barely missing sales estimates.
Meta Continues Tech Titan Sell-Off; Here Comes Apple
Stock Market Today: Stride Collapses; Enphase, Silgan Rally
Solar stock Enphase Energy jumped above its 50-day moving average as it continues to form a cup base. The company's third-quarter sales and earnings topped expectations late Tuesday.
Online education company Stride is breaking down badly. The stock plummeted more than 29% Wednesday after reporting earnings that drastically missed analyst estimates, despite a slight beat on revenue. The stock has gapped below the 50-day line and hit the 7% sell signal.
The Innovator IBD 50 ETF gained 0.7% in late afternoon trading, led by energy and packaging stocks.
Silgan Holdings — which makes containers for health care, beverages, personal care and other uses — gapped up 3.8% following the company's earnings report.
Amazon.com, Apple and Intel are all scheduled to report earnings tomorrow. Exxon Mobil and Chevron are expected to again see Q3 earnings skyrocket when they report on Friday.
Follow Michael Molinski on Twitter @IMmolinski
