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Stock Market News for Jan 26, 2023

The Dow closed in the green on Wednesday but the S&P 500 and Nasdaq ended in negative territory as disappointing earnings reports from a few big companies dented investors’ confidence amid growing fears of interest rate hikes and a slowing economy.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) gained less than 0.1% or 9.88 points to close at 33,743.84 points.

The S&P 500 fell 0.02% or 0.73 points to finish at 4,016.22 points. Utilities stocks were the biggest drag on the index performers, while financial and consumer discretionary stocks were the biggest gainers.

The Utilities Select Sector SPDR (XLU) fell 1.4%. The Financials Select Sector SPDR (XLF) and Consumer Discretionary Select Sector SPDR (XLY) gained 0.8% and 0.5%, respectively. Nine of the 11 sectors of the benchmark index ended in positive territory.

The tech-heavy Nasdaq shed 0.2% or 20.91 points to end at 11,313.36 points.

The fear-gauge CBOE Volatility Index (VIX) was down 0.63% to 19.08. Advancers outnumbered decliners on the NYSE by a 1.25-to-1 ratio. On Nasdaq, a 1.13-to-1 ratio favored advancing issues. A total of 10.89 billion shares were traded on Wednesday, higher than the last 20-session average of 10.78 billion.

Fears of Economic Slowdown Grow

Wall Street closed mostly lower, with the Dow somehow managing to end slightly in the green. The fourth-quarter earnings season is in full swing and investors monitored another batch of corporate earnings on Wednesday.

It has been a mixed earnings season so far, with the big tech companies reporting disappointing results. On Wednesday, tech companies took a major hit after Microsoft Corporation MSFT issued weak guidance that further raised concerns about a slowing economy. Microsoft reported second-quarter fiscal 2023 earnings of $2.32 per share, which beat the Zacks Consensus Estimate of $2.27 per share.

However, the tech giant gave gloomy guidance and sparked concerns about its megacap counterparts that are yet to report their quarterly results. Shares of Microsoft declined 0.6% on Wednesday.

Not only Microsoft, but several other big tech companies have also been sharing dismal outlooks for the ongoing and next quarter, which has raised fears of a recession amid concerns about rising interest rates.

Investors are waiting for more high-profile corporate earnings this week, including the likes of International Business Machines Corporation IBM and Tesla, Inc. TSLA. IBM has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Investors are also trying to assess Fed’s rate hike stance when lawmakers meet in early February for another round of interest rate hikes. The overall negative sentiment of fears of a recession has been taking a toll on stocks.

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