US STOCKS-S&P 500 closes slightly red as weak corporate guidance fuels recession fears

Reuters

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        * 
      AT&T gains on subscriber adds
    

        * 
      General Dynamics slides after weak outlook
    

        * 
      Tesla, IBM post results
    

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      Indexes: Dow up 0.03%, S&P 500 off 0.02%, Nasdaq down
0.18%
    

  
 (Updates with closing prices)
    By Stephen Culp
       NEW YORK, Jan 25 (Reuters) - The S&P 500 ended nominally
lower on Wednesday as a string of corporate earnings ran the
gamut from downbeat to dismal, reviving worries over the
economic impact of the U.S. Federal Reserve's restrictive
policy.
    All three major U.S. stock indexes pared their losses
throughout the afternoon to close well off session lows, with
the blue-chip Dow eking out a small gain in the final minutes.
        The tech-laden Nasdaq was weighed down after Microsoft
Corp  MSFT.O , the first major technology firm to post quarterly
results, offered dour guidance and raised red flags with respect
to its megacap peers which have yet to report.
    "We’ve had up and down days, that indicates an ongoing
tug-of-war," said Chuck Carlson, chief executive officer at
Horizon Investment Services in Hammond, Indiana. "The dour
guidance good news from the standpoint of what the Fed is doing
is working."
    "That outcome has become the catalyst for the market one way
or the other," Carlson added. "Earnings matter but what’s really
got the market’s focus is the Fed interest rate/inflation
story."
    Fourth-quarter earnings season has shifted into overdrive,
with 95 of the companies in the S&P 500 having reported. Of
those, 67% have beat consensus estimates, well below the 76%
average beat rate over the past four quarters, according to
Refintiv.
    Analysts now see aggregate S&P 500 earnings dropping 3.0%
year-on-year, nearly double the 1.6% drop seen on Jan. 1, per
Refinitiv.
    The Dow Jones Industrial Average  .DJI  rose 9.88 points, or
0.03%, to 33,743.84, the S&P 500  .SPX  lost 0.73 points, or
0.02%, to 4,016.22 and the Nasdaq Composite  .IXIC  dropped
20.92 points, or 0.18%, to 11,313.36.
        Five of the 11 major sectors of the S&P 500 ended lower,
with utilities  .SPLRCU  suffering the largest percentage loss.
  
    Abbott Laboratories  ABT.N  dropped 1.4%, as
weaker-than-expected medical device sales weighed on the stock. 
        Among gainers, News Corp  NWSA.O  jumped 
    5.7
    % after Rupert Murdoch 
    withdrew a proposal
     to reunite News Corp and Fox Corp.
  
        AT&T Inc  T.N  also delivered disappointing guidance but
its renewed focus on its telecoms business helped 
    boost subscriber numbers
    , sending its shares up 
    6.6
    %.
  
        General Dynamics Corp  GD.N  beat quarterly
expectations, but a 
    weak 2023 forecast
     helped send the defense contractor's shares sliding 
    3.6
    %.
  
        Shares of Tesla Inc  TSLA.O  whipsawed in extended
trading after the electric auto maker 
    beat
     fourth quarter revenue estimates.
  
        IBM  IBM.N  advanced after hours in the wake of posting
its highest annual 
    revenue growth
     in a decade. 
  
    Shares of Levi Strauss & Co  LEVI.K  jumped more than 6%in
extended trade after the jeans maker provided upbeat 2023
guidance. 
        Finally, in a post-script to Tuesday's technical glitch
which halted the opening auctions for a spate of stocks and
prompted a review by the U.S. Securities and Exchange Commission
(SEC), the New York Stock Exchange (NYSE) said a manual error
resulted in the snafu which caused widespread confusion at the
opening bell.
  
        Advancing issues outnumbered declining ones on the NYSE
by a 1.25-to-1 ratio; on Nasdaq, a 1.13-to-1 ratio favored
advancers.
  
        The S&P 500 posted 8 new 52-week highs and 1 new lows;
the Nasdaq Composite recorded 61 new highs and 30 new lows. 
  
        Volume on U.S. exchanges was 10.89 billion shares,
compared with the 10.78 billion average over the last 20 trading
days.
  
 (Reporting by Stephen Culp; Additional reporting by Shreyashi
Sanyal and Johann M Cherian in Bengaluru; Editing by Aurora
Ellis)
 ((stephen.culp@thomsonreuters.com; 646-223-6076;))

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