Wall Street opens lower, technology weighed down by Microsoft

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New York (AFP) – The New York Stock Exchange opened lower on Wednesday, dragged into the red by the tech sector weighed down by Microsoft’s gloomy forecast for 2023.

The Dow Jones index dropped 0.63%, the Nasdaq, with a strong technological coloring, lost 1.52% and the broader S&P 500 index fell by 0.99%, around 2:45 p.m. GMT.

The day before, after a salvo of corporate results, the New York indices had concluded in dispersed order.

The Dow Jones had advanced by 0.31% to 33,733.96 points, the Nasdaq had lost 0.27% to 11,334.27 points and the broader S&P 500 index had remained almost stable (-0.07%) at 4,016, 95 dots.

In the aftermath of better-than-expected quarterly results, IT giant Microsoft dragged the market down after gloomy forecasts for demand this year, suggesting a broader slowdown in activity around the world. The title fell by 4.01% at 2:40 p.m. GMT.

In a conference call with analysts, the company said it expects revenue of between $50.5 billion and $51.5 billion for the current quarter, less than expected by the market.

Microsoft also expects weaker demand than last year for its personal computer business, such as its Windows operating system.

Above all, the growth of remote computing (cloud) should continue to stall.

These prospects for a slowdown in cloud activity also caused Amazon, Microsoft’s competitor in this market, to lose almost 3%, noted analyst Patrick O’Hare of Briefing.

The mega-cap Alphabet, parent company of Google, also fell 1.99%, after having already closed down almost 2% the day before.

The US Department of Justice said Tuesday it was suing the internet giant for “monopoly” in the online advertising market.

Another heavyweight that weighed down the market: the aircraft manufacturer Boeing, a member of the Dow Jones, yielded 1.12%, after announcing disappointing quarterly and annual results before the opening of the stock market.

The aircraft manufacturer remained in the red for the fourth consecutive year, with a net loss of 4.9 billion dollars in 2022, despite a rise in turnover of 7% to 66.6 billion dollars.

The group still faces persistent problems in its supply chain and in recruitment, but it maintained its forecast for 2023 on Wednesday.

Overall, “investors were concerned about security valuation issues and the idea that the stock market may have gotten too far ahead of its January rally,” O’Hare said.

Other groups also published disappointing results or forecasts, which further darkened the mood of investors.

This was the case for Texas Instrument (-2.21%), the bank Capital One Financial (+0.36%) and the American hygiene products group Kimberly-Clark (-3.52%), in particular .

The quarterly turnover of the Texas manufacturer of Kleenex tissues and Cottonelle toilet paper suffered from the effects of exchange rates, falling slightly below forecasts.

For 2023, the group forecasts stagnant sales or, at best, an increase of 2%.

On the bond market, rates on two-year Treasury bills, sensitive to the immediate economic situation, fell sharply to 4.15%, against 4.21% the day before.

After the market closed, the results of Tesla (-1.54% at 2:40 p.m. GMT) and IBM (-1.06%) were expected.

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