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The S&P 500 ends slightly lower after mixed earnings, opening a gap

  • The SEC is investigating the error in the opening of the NISE
  • 3M falls on worse forecast for the first quarter
  • J&J falls on sales warning; GE falls on weak profit outlook
  • Microsoft gains in extended trading after results release
  • Indices: Dow rose 0.31%, S&P 500 fell 0.07%, Nasdaq fell 0.27%

NEW YORK, Jan 24 (Reuters) – The S&P 500 ended nominally lower on Tuesday at the end of a heavy session marked by a series of mixed earnings and a technical glitch at the open.

A flurry of shares on the NISE was halted at the top of the session due to an apparent technical glitch, causing initial price confusion and prompting an investigation by the US Securities and Exchange Commission (SEC).

More than 80 stocks were affected by the error, which caused large swings in the opening prices of dozens of stocks, including Walmart Inc ( VMT.N ) and Nike Inc ( NKE.N ).

“Everybody has computer problems, first the airlines and now it’s NISE,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snider in New York. “It seems to have been fixed quickly.”

“Some of the prints were obviously bad,” Grisky added. “It was a surprise. Unexpected.”

The Nasdaq joined the S&P 500 in negative territory, while the Dow finished modestly higher.

Fourth-quarter earnings season is in full swing, with 72 companies in the S&P 500 reporting. Of those, 65% beat the consensus, just a hair below the long-term average of 66%, according to Refinitiv.

Taken together, analysts now expect S&P 500 earnings to be down 2.9% from the same quarter last year, down from a 1.6% year-over-year decline recorded on Jan. 1, according to Refinitiv.

“The Fed will look at the earnings reports and look at how the economy is doing, given the interest rate hikes and other issues,” Grisky said. “We’re getting close to that point where the Fed sees enough progress in the fight against inflation to stop raising (interest) rates and that’s why the markets have been reacting positively lately.”

Economic data showed a shallower-than-expected contraction in the manufacturing and services sectors in the first weeks of the year, suggesting the Federal Reserve’s tight interest rates are dampening demand.

The Dow Jones Industrial Average (.DJI) rose 104.4 points, or 0.31%, to 33,733.96, the S&P 500 (.SPKS) lost 2.86 points, or 0.07%, to 4,016.95, and the Nasdaq Composite (.IKS04.1) fell 0.27% to 11,334.27.

Among the 11 major S&P 500 sectors, industrials suffered the biggest losses.

Intercontinental Exchange Inc ( ICE.N ), the owner of the New York Stock Exchange, fell 2.2% as SEC investigators searched for the cause of the confusion at the opening on Tuesday.

Shares of Alphabet Inc ( GOOGL.O ) fell 2.1% after the Justice Department filed a lawsuit against Google for abusing its dominance in the digital advertising business.

Industrial conglomerates 3M Co ( MMM.N ) and General Electric Co ( GE.N ) provided underwhelming guidance for the future due to inflationary headwinds.

Shares of 3M lost 6.2%, while shares of General Electric rose 1.2%.

Aerospace and defense companies Lockheed Martin Corp ( LMT.N ) and Raitheon Technologies Corp ( RTKS.N ) were a study in contrasts, with the former posting a disappointing profit forecast and the latter beating estimates on solid travel demand.

Lockheed Martin and Raitheon rose 1.8% and 3.3%, respectively.

Rail operator Union Pacific Corp missed profit estimates as labor shortages and poor delivery times delayed deliveries. Its shares fell by 3.3%.

Microsoft ( MSFT.O ) gained more than 4% in extended trading after narrowly missing quarterly revenue estimates.

Advancing issues outnumbered declining ones on NISE by a ratio of 1.01 to 1; on the Nasdaq, a ratio of 1.17 to 1 favored the decline.

The S&P 500 posted 26 new 52-week highs and 10 new lows; The Nasdaq Composite recorded 77 new highs and 22 new lows.

Volume on US exchanges was 10.58 billion shares, compared to an average of 10.61 billion over the past 20 trading days.

Reporting by Stephen Culp; Additional reporting by Shreyashi Sanjal and Johan M Cherian in Bengaluru; Editing by Aurora Ellis

Our Standards: Thomson Reuters Trust Principles.

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