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Nasdaq closes slightly lower for second day as earnings season rolls on

The Nasdaq closed lower for a second day as investors pored over the latest batch of corporate earnings and assessed how the biggest companies are faring amid rising interest rates and growing fears of a recession.

The Dow Jones Industrial Average edged up slightly, rising 9.88 points, or 0.03%, to end at 33,743.84. The Nasdaq Composite dipped 0.18% to close at 11,313.36, while the S&P 500 dipped 0.02% to 4,016.22.

Stocks pared their losses in afternoon trading, with the Dow rebounding from a drop of more than 460 points. At its lowest point, the Nasdaq fell 2.34 per cent.

The technology exposed the bulk of the session’s losses after Microsoft’s lackluster guidance further fueled concerns. The software giant last traded flat after falling for most of the session. Boeing finished slightly higher despite a top- and bottom-line miss.

“If the company is bearish on its own future, why should investors be bullish? That’s pretty much the message we’re getting from the earnings season so far,” said Adam Sarhan, CEO of 50 Park Investments.

Investors bought stocks heading into the period in anticipation of better-than-expected prints as companies reset and lowered expectations. But reports so far across sectors have mostly dashed those hopes, as many companies share a bleak outlook, he said.

Investors are bracing for more high-profile corporate earnings this week as fears of a recession persist, with Tesla and IBM among the companies scheduled to post numbers after the hour. So far, more than 19% of S&P 500 companies have reported fourth-quarter earnings, with 68% of them posting stronger-than-expected results, according to FactSet.

However, this rate lags historical trends, according to The Earnings Scout CEO Nick Raich. The average hit rate for fourth-quarter earnings is 79%, he pointed out in a Friday note.

As of Wednesday’s close, all three major averages are trading higher for the week, with the Nasdaq up 1.55%. The S&P and Dow are 1.1% higher.

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