Live Stock Market News Updates: Stocks Fall, Yields Rise as Investors Analyze Corporate Earnings

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US stocks snapped a winning streak to end a back-and-forth session lower on Wednesday, as the rally that started the week faltered despite better-than-feared earnings reports.

The S&P 500 (^GSPC) sank 0.7% after the index gained more than 4% in the past two days, while the Dow Jones Industrial Average (^DJI) lost about 100 points, or 0. ,3 %. The Nasdaq High Tech Composite (^IXIC) was down 0.9%. Meanwhile, the benchmark 10-year Treasury note soared above 4.1%.

Netflix (NFLX) was in the spotlight after a big earnings surge on Tuesday afternoon that included 2.41 million new subscribers, a key metric watched by analysts, more than double Wall Street’s estimate of 1 million additions. Executives noted in the earnings statement that the company is “on track to accelerate growth again” after a challenging first half of the year. The shares rose 13.1% on Wednesday.

Elsewhere on the earnings front, shares of Abbot Laboratories (ABT) fell 6.4% after the medical device maker reported weaker-than-expected growth in international medical device sales due to trading difficulties. a strong US dollar and supply problems in China.

Shares of United Airlines Holdings (UAL) closed nearly 5% higher after the airline reported higher-than-expected third-quarter earnings results due to strong travel demand and an earnings forecast for the current quarter that exceeded expectations. Wall Street estimates.

Strong reports from Netflix and United Airlines add to a series of generally upbeat corporate results released earlier in the week by the likes of Goldman Sachs (GS) and Johnson & Johnson (JNJ).

Although the numbers have so far been better than expected, of the companies that have reported results for the third quarter to date, only 69% posted actual earnings per share above estimates, below the 5-year average of the 77%, according to FactSet Research. And of those that beat estimates, earnings beat estimates by 0.1%, well below the 5-year average of 8.7%.

Signage at the Netflix booth is seen on the convention floor at Comic-Con International in San Diego, California, U.S., July 21, 2022. REUTERS/Bing Guan

Many Wall Street strategists have stressed that valuations have yet to fully reflect lower earnings consistent with the ongoing slowdown in economic growth, pointing to future earnings projections that remain too high.

“If, as we expect, third-quarter earnings disappoint and future earnings expectations turn lower, we may see another drop for stocks,” Gargi Chaudhuri, head of investment strategy at iShares, said in a note. at BlackRock. “Don’t be fooled and chase these bear market rallies.”

“The market will, of course, eventually bottom out, but until the Fed changes course or earnings are properly marked lower, we believe that time has not yet come,” Chaudhuri said.

NEW YORK, NEW YORK - OCTOBER 18: Traders work on the floor of the New York Stock Exchange during morning trading on October 18, 2022 in New York City.  The stock market opened higher with the Dow Jones gaining more than 600 points, the S&P 500 jumping 2.20% and the Nasdaq Composite gaining 2.6% adding to gains that began Monday.  (Photo by Michael M. Santiago/Getty Images)

NEW YORK, NEW YORK – OCTOBER 18: Traders work on the floor of the New York Stock Exchange during morning trading on October 18, 2022 in New York City. (Photo by Michael M. Santiago/Getty Images)

In commodity markets, oil rose amid concerns that new European sanctions on Russia could further reduce supply. The Biden administration is expected to announce a plan on Wednesday to release 15 million barrels of US strategic reserves to stifle gas prices. West Texas Intermediate (WTI) crude futures rose about 3.4% to trade above $85 a barrel.

Across the Atlantic, the UK continued a volatile stretch as investors priced in double-digit September inflation of 10.1%, calling into question a recent emergency move by the Bank of England to sell government bonds. . The pound weakened and gilts fell.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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