- Target plunges over 20% after muted holiday-quarter sales forecast
- Nvidia slips before results due after market close
- Indexes: Dow up 0.32%, S&P flat, Nasdaq down 0.11%
(Reuters) - The tech-heavy Nasdaq closed lower on Wednesday, taking a break from the prior session's rally as investors worried about escalating Russia-Ukraine tensions and weak results from Target, while awaiting earnings from megacap Nvidia that landed after the bell.
The Dow and S&P 500 ticked up late in the session, with the Dow closing higher and the S&P 500 ending flat.
Stocks fell early in the session, after a report said Ukraine fired long-range British Storm Shadow missiles into Russian territory. On Tuesday, Ukraine launched U.S.-made ATACMS missiles into Russia, and Russia announced it had lowered the threshold for nuclear action.
Wall Street's "fear gauge" jumped to 18.79 before easing to 17.24, still at its highest since the Nov. 5 U.S. presidential election.
"It's gotten a little more defensive today after a strong rally yesterday from growth stocks and the tech sector," said James Regan, Director of Wealth Management Research at D.A. Davidson
"Maybe there's a conservative view ahead of Nvidia earnings or a broader reaction from Target's earnings which is a consumer bellwether. There are also more geopolitical concerns with tensions in Ukraine and Russia and the U.S. evacuating embassies," Regan said.
AI chipmaker Nvidia fell 0.76% during the trading session ahead of its results. The stock fell further after the bell when its fourth-quarter revenue forecast was slightly above estimates, but failed to meet lofty expectations of some investors.
During regular trading, the index heavyweight dragged down the Information Technology sector 0.23% and the tech-heavy Nasdaq 0.11%.
Target plunged 21.4% after the retailer forecast holiday-quarter comparable sales and profit below Wall Street expectations following a third-quarter estimate miss.
The consumer discretionary index was the biggest sectoral decliner, falling 0.57%.
Growth stocks like Tesla and Amazon.com also fell 1.15% and 0.85% respectively.
The Dow Jones Industrial Average rose 139.53 points, or 0.32%, to 43,408.47, the S&P 500 gained 0.13 points, or 0.00%, to 5,917.11 and the Nasdaq Composite lost 21.32 points, or 0.11%, to 18,966.14.
Nvidia shares have nearly tripled in value this year, accounting for about 20% of the S&P 500's returns over the last 12 months, according to BofA Global Research.
"We're starting to see commentary from larger companies that have been deploying capital in the AI, tech spend space talking about examples of how that spend is converting to either higher revenue or cost savings. That bodes well for companies like Nvidia that are on the picks and shovels side of that tech, AI spend trade," said Bill Merz, head of Capital Markets Research for U.S. Bank's asset management group.
Cryptocurrency stocks ticked higher as bitcoin jumped above $94,000, with MicroStrategy soaring 10% and MARA Holdings up 13.9%.
Traders have increased bets on the U.S. central bank leaving interest rates unchanged at its December meeting in the wake of strong economic data and signs of persistent inflation.
Declining issues outnumbered advancers by a 1.24-to-1 ratio on the NYSE. There were 184 new highs and 94 new lows on the NYSE.
On the Nasdaq, 2,007 stocks rose and 2,245 fell as declining issues outnumbered advancers by a 1.12-to-1 ratio. The S&P 500 posted 30 new 52-week highs and 13 new lows while the Nasdaq Composite recorded 92 new highs and 163 new lows.
Volume on U.S. exchanges was 13.20 billion shares, compared with the 14.32 billion average for the full session over the last 20 trading days.
Reporting by Abigail Summerville in New York; additional reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru; Editing by David Gregorio
Source: Reuters