U.S. stocks ended mixed Wednesday as investors took in a host of quarterly earnings results and looked ahead to more data.
The Dow gained to extend advances from the previous session. The S&P 500, and the tech-heavy Nasdaq Composite underperformed as Netflix (NFLX) shares slumped after the company posted an unexpected decline in quarterly subscriber numbers. The streaming giant posted its worst day since 2004, with the stock down just over 35% by the end of the trading day.
Netflix's disappointing results and guidance came in the midst of an earnings season that has so far been mixed. Hasbro (HAS) shares gained after the company raised its margin guidance and announced new price increases to counter rising costs. Other closely watched companies missed on major metrics or guidance, however, with Lockheed Martin (LMT) posting a year-over-year revenue decline that sent shares lower following its Tuesday report, and Johnson & Johnson (JNJ) cutting its full-year profit forecast.
And last week, the big banks posted tepid quarterly results, with financials posting their weakest start to an earnings season since the first quarter of 2020, according to Bank of America data. Just over one-third of the 11 financial names that reported results in the past week topped analyst estimates on both sales and earnings per share, analysts at Bank of America said in a note.
Overall, investors this earnings season have been closely attuned to how companies have performed in the face of rampant inflationary pressures, as prices rise at their fastest rates in 40 years. While many companies have opted to raise their own prices to help offset increasingly expensive commodities, transportation and other inputs, questions remain over how long consumers will be willing to continue paying passed-on costs.
And against this backdrop, many strategists are warnings investors to continue bracing for further volatility.
"Volatility works both ways," said Steve Sosnick, Interactive Brokers chief strategist, told Yahoo Finance Live. He added that Tuesday's marked move to the upside was simply "socially acceptable volatility."
"It's volatility in the right direction," he said. "But we're going to have to get used to bigger moves in both directions. And not only single day moves, but sort of multi-day runs."
4:04 p.m. ET: Stocks end mixed: Dow gains 250 points, or 0.7%, while Nasdaq drops 1.2% as Netflix logs worst day since 2004
Here were the main moves in markets as of 4:04 p.m. ET:
S&P 500 (^GSPC): -2.75 (-0.06%) to 4,459.46
Dow (^DJI): +249.59 (+0.71%) to 35,160.79
Nasdaq (^IXIC): -166.59 (-1.22%) to 13,453.07
Crude (CL=F): Unchanged at 102.56
Gold (GC=F): +$0.20 (+0.01%) to $1,959.20 per ounce
10-year Treasury (^TNX): -7.3 bps to yield 2.8400%
10:00 a.m. ET: Existing home sales dip in back-to-back month
Sales of previously owned homes fell for a second consecutive month in the U.S. in March, with signs of cooling housing market activity mounting as home prices remain elevated and interest rates creep higher.
U.S. existing home sales fell by 2.7% in March to reach a seasonally adjusted annualized rate of 5.77 million, according to the National Association of Realtors. February existing home sales were also downwardly revised to 5.93 million, compared to the 6.02 million previously reported.
The median price for an existing home in the U.S. in March jumped 15% over last year to reach $375,300.
“Home prices have consistently moved upward as supply remains tight,” Lawrence Yun, chief economist at the National Association of Realtors, said in a press statement. “However, sellers should not expect the easy-profit gains and should look for multiple offers to fade as demand continues to subside.”
9:42 a.m. ET: Mortgage applications fall for sixth straight week as rates rise
Mortgage applications across the U.S. declined for a sixth consecutive week as rising interest rates deterred homeowners from refinancing and some new buyers from entering the market. Last week, the average 30-year fixed mortgage rate rose to reach 5%.
The Mortgage Bankers Association's weekly index showed mortgage loan application volume fell 5% week-on-week during the period ended April 15. This came following a 1.3% decline during the previous week.
Refinances were down by 8% from the previous week and slid 68% versus the comparable week last year. Meanwhile, purchases were down 3% from a week earlier. On a seasonally unadjusted basis, purchases were also down by 14% over last year.
"The recent surge in mortgage rates has shut most borrowers out of rate/term refinances, causing the refinance index to fall for the sixth consecutive week," Joel Kan, MBA associate vice president of economic and industry forecasting, said in a press statement Wednesday. "In a housing market facing affordability challenges and low inventory, higher rates are causing a pullback or delay in home purchase demand as well. Home purchase activity has been volatile in recent weeks and has yet to see the typical pick up for this time of the year.”
9:30 a.m. ET: Stocks open higher
Here's where markets were trading shortly after the opening bell Wednesday morning:
S&P 500 (^GSPC): +24.30 (+0.54%) to 4,486.51
Dow (^DJI): +269.29 (+0.77%) to 35,180.49
Nasdaq (^IXIC): +39.37 (+0.29%) to 13,658.39
Crude (CL=F): +$0.68 (+0.66%) to $103.24 a barrel
Gold (GC=F): -$10.70 (-0.55%) to $1,948.30 per ounce
10-year Treasury (^TNX): -2.5 bps to yield 2.89%
9:06 a.m. ET: Procter and Gamble shares rise after sales guidance tops estimates, as price hikes help offset rising costs
Shares of Procter & Gamble (PG) rose Wednesday morning after the consumer staples giant posted fiscal third-quarter results and full-year guidance that exceeded Wall Street's estimates. The results appeared to affirm that Procter & Gamble's last round of price hikes announced earlier this year were helping boost sales and counteract some of the impact of rising input costs.
For the third quarter, net sales came in at $19.38 billion, topping estimates for $18.73 billion, according to Bloomberg consensus data. This revenue beat was in turn led by fabric and home care segment sales of $6.7 billion, which includes brands like Tide and Downy. Company-wide organic revenue grew 10%, or well above the 6.2% rise anticipated.
P&G also said it saw full-year organic revenue rising between 6% and 7%, or better than the 5.5% increase anticipated. The company still sees its core earnings per share coming in at as much as $6.00 for the full fiscal year.
7:06 a.m. ET: Stock futures head for mixed open
Here were the major moves in markets Wednesday morning:
S&P 500 (^GSPC): +3.75 (+0.08%) to 4,463.00
Dow (^DJI): +63 (+0.18%) to 34,904.00
Nasdaq (^IXIC): -9.75 (-0.07%) to 14,207.5
Crude (CL=F): +$0.73 (+0.71%) to $103.29 a barrel
Gold (GC=F): -$3.90 (-0.2%) to $1,955.10 per ounce
10-year Treasury (^TNX): -5 bps to yield 2.865%
6:12 p.m. ET: Stock futures open lower
Here's where stocks were trading Tuesday evening:
S&P 500 futures (ES=F): -18.5 points (-0.41%) to 4,440.75
Dow futures (YM=F): -59 points (-0.17%) to 34,782.00
Nasdaq futures (NQ=F): -124 points (-0.87%) to 14,093.25
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.