The Dow Jones Industrial Average and S&P 500 rose for a fourth day Wednesday, as traders shook off disappointing earnings from tech giants Microsoft and Alphabet.
The 30-stock Dow traded 314 points higher, or 1%, as Visa shares gave the index a boost on strong quarterly numbers. The S&P 500 climbed 0.6% after being down earlier in the session. The Nasdaq Composite lagged, trading down 0.2%
Tuesday’s tech earnings dragged down the market earlier in the day, but investors looked to other companies that were outperforming expectations and receding bond yield rates for hope.
“The interest rates have really started to bite in terms of knocking down the inflation story,” said Jamie Cox, managing partner for Harris Financial Group. “That’s really important for markets.”
Shares of Google-parent Alphabet dropped 6.4% after the tech giant missed expectations on the top and bottom lines. Alphabet also reported a decline in YouTube ad revenue, which spurred investors to deliberate the outlook for other tech companies that rely on ad spending.
Meanwhile, Microsoft declined about 6% after the tech giant reported weaker-than-expected cloud revenue in its latest quarterly results, despite beating earnings and revenue estimates. The company also issued current-quarter revenue guidance that fell short of expectations.
In other earnings news, Harley-Davidson shares rose 6.7% after the motorcycle maker reported beating expectations before the bell. Boeing lost 2.9% after the jet maker reported a quarterly loss and missed revenue expectations.
“Investors probably were caught a little by surprise by the negative guidance offered by Microsoft,” said Sam Stovall, chief investment strategist at CFRA, while noting others like Coca-Cola and UPS are faring better. “I think investors are feeling a little bit better about the more large-cap, blue-chip stocks.”
The major averages came into Wednesday’s session riding a three-day winning streak.