S&P, Dow slide after Boeing results; Nasdaq fall cushioned by Microsoft

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(Reuters) – The S&P 500 and the Dow fell sharply on Wednesday after planemaker Boeing (NYSE:BA) reported a record annual loss, while declines on the Nasdaq were offset by upbeat results from Microsoft.

Boeing Co fell 3% and was among the top drags on the S&P 500 and the Dow Jones Industrial Average after the planemaker took a hefty $6.5 billion charge on its all-new 777X jetliner due to the COVID-19 pandemic and the aftermath of a two-year safety crisis over its 737 MAX.

Declines were across the board in early trading, with 10 of the 11 major S&P 500 sectors in negative territory. Defensive sectors, including consumer staples, were trading higher, while real estate and utilities posted the smallest declines.

The CBOE Market Volatility index, often used as a gauge for investor anxiety, rose 5.63 points, hitting its highest since Jan 4.

In a week packed with quarterly earnings from mega-cap companies, Microsoft Corp (NASDAQ:MSFT) gained 3% after its results as the software maker continues to benefit from remote working and learning trends globally.

Microsoft’s results set a positive precedent for other technology-related companies including Apple Inc (NASDAQ:AAPL), Tesla (NASDAQ:TSLA) Inc and Facebook Inc (NASDAQ:FB), which are set to report quarterly numbers later in the day.

These heavyweight majors have recently come back into favor after blowout results from streaming giant Netflix Inc (NASDAQ:NFLX), and as investors dumped economy-linked banks, energy and small-cap stocks.

However, concerns about heightened stock market valuations, raging coronavirus cases and any potential disruption to vaccine rollouts have spooked investors about a pullback and increase in volatility in the near-term.

“The market is kind of in a wait-and-see mode. Investors just want to gather more information from the earnings season, they want more confidence from the Fed, and we should get a big insight into that today,” said Craig Erlam, senior market analyst at OANDA.

The Federal Reserve is expected to keep monetary policy locked in crisis-fighting mode at its meeting ending on Wednesday, with investors also looking forward to relief from ongoing vaccinations and new government spending plans.

At 10:07 a.m. ET the Dow Jones Industrial Average was down 429.73 points, or 1.39%, at 30,507.31, the S&P 500 was down 50.36 points, or 1.31%, at 3,799.26, and the Nasdaq Composite was down 141.04 points, or 1.04%, at 13,485.03.

Starbucks Corp (NASDAQ:SBUX) fell 5.5% after the coffee chain reported a larger-than-expected fall in quarterly sales, as the renewed surge in coronavirus cases in the U.S. kept customers at home.

Walgreens Boots Alliance (NASDAQ:WBA) Inc jumped 4.9% after the drugstore chain named the outgoing chief operating officer of Starbucks, Roz Brewer, as its CEO.

Videogame retailer GameStop Corp (NYSE:GME)’s shares surged another 97.3% on Wednesday, as amateur investors continued to pile into the stock that has skyrocketed nearly 700% over the past two weeks.

Declining issues outnumbered advancers for a 5.36-to-1 ratio on the NYSE and a 6.05-to-1 ratio on the Nasdaq.

The S&P index recorded 24 new 52-week highs and no new low, while the Nasdaq recorded 76 new highs and 15 new lows.