Wall Street slips as weak earnings hit tech, travel stocks
NEW YORK (AP) — Stocks fell in midday trading on Wall Street Tuesday as disappointing earnings reports weighed on technology and travel companies.
The S&P 500 fell 0.4% as of 12:12 p.m. Eastern. The Dow Jones Industrial Average fell 20 points, or 0.1%, to 32,812 and the Nasdaq fell 1.3%.
Technology stocks fell broadly and weighed down the broader market. Chipmaker Micron Technology fell 5.7% after warning investors that revenue could fall short of forecasts because of weakening demand. That warning hit other chipmakers hard, with Nvidia shedding 5.6%.
Norwegian Cruise Line plunged 12.2% after reporting disappointing financial results and giving investors a weak revenue forecast. The weak results weighed down travel-related stocks. Expedia fell 3.2% and American Airlines fell 3.3%.
U.S. crude oil prices were little changed and energy stocks gained ground. Exxon Mobil rose 2.9%.
Audience rating company Nielsen surged 21.4% after it announced progress on a deal to be acquired by private equity firms.
Bond yields rose. The yield on the 10-year Treasury rose to 2.78% from 2.75% late Monday.
Investors have been closely watching the latest round of corporate earnings and economic data for clues on how inflation is hurting consumers and businesses. As the earnings season winds down, Disney, Wendy's and Wynn Resorts will be reporting quarterly results this week.
The U.S. Labor Department will release its July report for consumer prices Wednesday, followed by its producer prices report on Thursday. Investors and economists will look for any signs that the Federal Reserve's aggressive rate hikes the past few months have helped to bring inflation under control.
“Regardless of that number, there's still going to be an environment where they're raising rates,” said Michael Landsberg, chief investment officer of Landsberg Bennett Private Wealth Management.
The Fed has raised rates four times this year in an effort to hit the brakes on the economy and cool the hottest inflation in four decades. Wall Street is worried that the central bank could slam the brakes too hard and tip the economy into a recession. Last week's strong July jobs report has most economists predicting the Fed will again raise short-term interest rates by as much as another threequarters of a point at its September meeting.
Most economic data already points to a slowdown. The U.S. economy has now contracted for two straight quarters, which constitutes an informal indicator of a recession. But recession fears have been tempered by a hot jobs market with unemployment at historic lows. While that's good for the economy, it is a sign that inflation persists.