Stock market today: Dow ends flat as Microsoft fights back, financials gain By Investing.com
Stock Markets 32 minutes ago (Jan 25, 2023 04:24PM ET)
By Yasin Ebrahim
Investing.com — The Dow cut losses to close flat Wednesday, inspired by Microsoft’s rebound from intraday lows and gains in the financials as investors continued to digest a slew of quarterly results ahead of a key inflation report due Thursday.
Microsoft Corporation (NASDAQ:MSFT) recovered intraday losses to close just below the flatline after reporting quarterly results that beat on the top line, led by surprise strength in its cloud business, though revenue missed estimates. The company flagged slower cloud growth ahead, warning that companies were optimizing their digital spending to save costs.
The remarks on slowing enterprise spending prompted a wave of negative commentary from analysts on Wall Street. But others expressed confidence that spending will return sooner than expected and pointed to Microsoft’s recent cost-cutting efforts as catalysts for growth as soon as the fiscal fourth quarter.
“Microsoft’s expense efficiencies, meanwhile, will start to bear fruit in 4Q with continued tailwinds into FY24, we believe earnings and revenue growth could have troughed in F2Q23 followed by stability and potential re-acceleration towards the end of CY23, which is why we reaffirm our Buy rating and $315 PT,” Goldman Sachs said.
Semiconductor stocks, meanwhile, were kept in the red by a 1% fall in chip bellwether Texas Instruments Incorporated (NASDAQ:TXN) after the chipmaker misses quarterly revenue estimates, and guidance on earnings fell short of analysts’ estimates.
“TXN confirmed that all segments (ex-auto) were weak in 4Q and were expected to weaken further in 1Q as customers reduce inventory,” Credit Suisse said in a note. “[P]otential incremental margin headwinds keeps us on the sideline as we await more detail from next week’s call,” it added.
Financials were also a source of support for the broader market’s move off session lows as sentiment on regional banks was boosted by a surge in U.S. Bancorp (NYSE:USB) on better-than-expected fourth-quarter earnings.
In other earnings news, AT&T Inc (NYSE:T) delivered quarterly results that beat on the bottom line as the telecommunications company racked up more wireless subscribers than expected in the fourth quarter.
Stock market today: Dow ends flat as Microsoft fights back, financials gain
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