Stocks turn mixed on Wall Street amid weak tech earnings

Traders work on the floor at the New York Stock Exchange in New York, Aug. 10, 2022. Stocks slipped in morning trading on Wall Street Wednesday, Oct. 26, 2022 and big technology stocks were the heavy weights on major indexes following several weak earnings reports and financial forecasts. The S&P 500 fell 0.4, despite more stocks gaining ground than falling in the benchmark index. The tech-heavy Nasdaq slipped 1.5%. The Dow Jones Industrial Average gained ground. Alphabet and Microsoft each slumped after reporting disappointing results. (AP Photo/Seth Wenig, file)

Stock indexes are mixed on Wall Street in afternoon trading Wednesday as investors weigh the latest batch of earnings reports, including weak results from several heavyweight technology companies.

The S&P 500 was down 0.4% as of 2:24 p.m. Eastern, after shedding an early gain. The Dow Jones Industrial Average briefly climbed more than 335 points, but its gain narrowed to 42 points, or 0.1%, to 31,874. Smaller company stocks far outpaced the broader market. The Russell 2000 jumped 1.4%.

The tech-heavy Nasdaq fell 1.7%. It was weighed down by several stocks with huge valuations, which can have a big effect on market indexes.

Google's parent company, Alphabet, slumped 8.3% after it reported disappointing third-quarter financial results as advertising sales weakened. Weak ad sales are threatening other tech and communications companies. Music streaming service Spotify fell 12.2% after it reported a bigger third-quarter loss than Wall Street expected.

Microsoft slid 6.3% after it reported disappointing growth for its cloud computing company, while profits fell along with PC sales. Chipmaker Texas Instruments fell 2.7% after giving investors a discouraging forecast for the current quarter.

Visa rose 4.5% after reporting strong financial results and raising its dividend. Norfolk Southern gained 3.7% after reporting a surge in profits on an increase in shipping rates.

Outside of earnings, Mobileye Global, Intel’s self-driving unit, rose 29.7% in its market debut.

Several other big companies are on deck to report earnings this week. Facebook's parent company, Meta, will report earnings later Wednesday, while Apple reports its results on Thursday.

Internet retail giant Amazon also reports its results on Thursday along with industrial bellwether Caterpillar and McDonald’s.

Long-term Treasury yields continued to pull back from their multiyear highs. Gains in those rates have sent mortgage rates sharply higher this year.

The yield on the 10-year Treasury fell to 4.02% from 4.10% late Tuesday. The two-year yield fell to 4.43% from 4.48%.

Investors are mainly focused on earnings this week, but are waiting for several economic updates as they try to get a better picture of how inflation is impacting businesses, consumers and the Fed's plans for interest rate increases.

The government will release its first estimate on third-quarter gross domestic product on Thursday. The U.S. economy is already slowing down and actually contracted during the first half the year. On Friday the government will also release more data on personal income, consumption and spending.

The latest economic data is being closely watched for any signs of a slowdown as Wall Street tries to determine if and when the Fed might ease up on its interest rate increases. The central bank is expected to raise interest rates another three-quarters of a percentage point at its upcoming meeting in November. But traders have grown more confident that it will dial down to a more modest increase of 0.50 percentage points in December, according to CME Group.

Investors have been concerned that the Fed could go too far with rate increases and cause a recession by slowing the economy too much.

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Joe McDonald and Matt Ott contributed to this report.