US stocks were mixed on Wednesday after strong quarterly results from Microsoft (MSFT) and Alphabet (GOOGL) which started to take big profits from tech this week.
The S&P 500 (^GSPC) is down 0.3% as of 2:21pm ET while the Dow Jones Industrial Average (^DJI) is down 0.6. The technology-heavy Nasdaq Composite (^IXIC) rose 0.6%, paring previous gains.
Government bonds rose. The yield on the 10-year note increased to 3.44%, while the yield on the two-year note increased slightly, to 3.98%.
Tech giants Microsoft and Alphabet both reported better-than-expected earnings and revenue for the fourth quarter after the close on Tuesday.
Microsoft rose more than 7% after the software giant reported third-quarter financial earnings that beat estimates on Tuesday, indicating growing strength in its artificial intelligence and cloud businesses. And Microsoft achieved $ 2.45 per share, on revenues of $ 52.9 billion, compared to profits of $ 2.22 per share, on $ 49.4 billion for the same period last year.
However, Microsoft’s potential acquisition of Activision Blizzard (ATVI) suffered a setback Wednesday morning, as UK regulators blocked the deal over competition concerns. Activision stock is down about 12%.
Alphabet’s first-quarter earnings showed a 2% increase in search revenue, which is significantly lower than corresponding quarters from the past two years. Meanwhile, Bing app installs quadrupled after it was augmented by artificial intelligence. Stocks rose slightly.
Meta (META) earnings rose next after the bell on Wednesday, while Amazon (AMZN) announced Thursday.
The stock rally has been fueled by tech stocks so far this year, but some analysts expect the sector to come under selling pressure as it loses ground. Investors remain concerned that the earnings growth outlook could be weaker, which has led some market strategists to predict a decline that has yet to materialize.
On the banking front, PacWest Bancorp (PACW) reported earnings after Tuesday’s close that beat EPS estimates, sending the stock higher.
The action in the banking sector came on the heels of a nearly 50% drop in First Republic Bank (FRC) stock after the regional lender reported a larger-than-expected drop in deposits on Monday. The bank is considering selling the assets, Bloomberg reportedin the aftermath of the Silicon Valley bank collapse and turmoil in the sector.
First Republic extended its rout, dropping more than 20% on Wednesday after a CNBC report said advisors backed potential buyers of new shares as part of the bailout.
First Republic’s drastic move lower on Tuesday sent the KBW Regional Banking Index lower, which fell to a low. Lowest level Since November 2020.
Meanwhile, the consumer is still doing well despite slowing inflation. Visa (V) reported earnings that beat the highest and most recent forecast for the fourth quarter on Tuesday that showed a continued post-pandemic recovery in international travel.
Elsewhere, mortgage applications to purchase a home rose for the second time in the past three weeks, indicating stability in the housing market, according to Mortgage Bankers Association weekly survey. Other data released on Wednesday showed that orders for manufactured goods in the United States rebounded in March from new contracts for passenger aircraft, but business investment fell again for the month.
Separately, Boeing (BA) once again missed Wall Street’s estimates for the first quarter. Boeing earned $1.27 a share on revenue of $17.9 billion, compared to a profit of $2.75 on $14 billion in sales for the same period last year. However, the stock rose 2%.
Danny Romero is a reporter at Yahoo Finance. Follow her on Twitter @employee
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