Stocks Drift Lower Ahead of Big Tech Earnings This Week

Barry Adams
24 Apr, 2023
New York City

Benchmark indexes struggled on the first day of a new week and tech stocks led the decliners ahead of a big week of earnings. 

Investors turned cautious ahead of earnings from Microsoft, Alphabet, Amazon, MasterCard and Meta Platforms. 

So far about 300 companies have released earnings and most companies have managed to meet sharply lowered earnings estimates. 

However, tech companies are expected to report a sharp decline in advertising revenues and falling margins as business held back spending on digital marketing and acquiring new software services. 

Investors are also cautious ahead of the rate decision next week and most market participants are factoring a 25-basis points increase in rates. 

However, some investors are hoping that the Federal Reserve will offer more clarity and may signal a pause. 

 

Indexes & Yields 

The S&P 500 index fell 0.1% to 4,128.33 and the Nasdaq Composite index decreased 0.5% to 12,013.01. 

The yield on 2-year Treasury notes declined to 4.14%, 10-year Treasury notes fell to 3.51% and 30-year Treasury bonds hovered near 3.71%. 

Crude oil rose 53 cents to $78.39 a barrel and natural gas futures decreased 2 cents to $2.20 a thermal unit. 

 

Stock Movers 

Coca-Cola Company increased 0.5% to $64.35 after the beverage maker reported better-than-expected results in its latest quarter. 

Revenue in the first quarter increased 5% to $11.0 billion and net income attributable to shareholders rose 12% to $3.1 billion from $2.8 billion and diluted earnings per share advanced 72 cents from 64 cents a year ago. 

Revenue growth was driven by 11% increase in price and volume mix and 1% growth in concentrate sales. 

Unit case volume was flat in North America but declined 3% in Europe, Middle East and Africa after prices rose 22% in local currencies. unit case volume surged 10% in Asia Pacific on the price increase of 5%. 

Strong growth in unit case volume in Western Europe, Pakistan and South Africa was more than  offset by the suspension of business in Russia and the impact of the earthquake in Türkiye in February. 

The company reiterated its full-year 2023 revenue growth outlook between 7% and 8% and estimated commodities price inflation in mid single-digit on comparable cost of goods sold. 

Bed Bath & Beyond Inc plunged 31% to 20 cents and extended this year's loss to 87% after the company filed for bankruptcy protection on Sunday. 

The struggling household goods retailer had warned for months that the company may have to seek bankruptcy protection in the event it fails to raise enough capital. 

Credit Suisse Group AG increased 2.1% to 90 cents after the company reported a surge in revenue in its latest quarter and said deposit outflow slowed to 61 billion Swiss francs. 

The adjusted revenue, which excludes the write down of additional tier 1 bonds, declined and the bank swung to a loss. 

Walt Disney Company fell 0.4% to $99.14 and the company announced a second layoff on Monday that is expected to hit employees in California, Connecticut and New York.

The company had earlier said it plans to eliminate about 7,000 jobs as a part of its reorganization that is expected to save $5.5 billion.