Dow declines, S&P 500 stabilizes after medtech gains, Netflix withdraws

(Reuters) – The S&P 500 closed nearly unchanged on Wednesday, while the Dow fell as investors absorbed a mixed bag of corporate earnings, including upbeat reports from medical technology companies, which were offset by weakness in Netflix shares.

The Dow was affected by declines in shares of The Walt Disney Company (DIS.N) and United Health Group Inc (UN.N) after the results of competitors in their industries.

Major equity indices were largely flat during the early stages of a first-quarter earnings season in which investors expect tepid results.

“Companies’ results are viewed in large part as company-specific news versus market news,” said Art Hogan, chief market strategist at B Riley Wealth. “If that keeps us relatively calm and unchanged at the moment, while our sample group of reporters is still very small, I think that’s a positive thing.”

The Dow Jones Industrial Average fell 79.62 points, or 0.23%, to 33,897.01 points. The S&P 500 (.SPX) lost 0.35 points, or 0.01%, at 4,154.52. The Nasdaq Composite Index (.IXIC) rose 3.81 points, or 0.03%, to 12,157.23.

Defense Utilities Group (.SPLRCU) was the biggest gainer among the S&P 500 sectors, up 0.8%.

The CBOE Volatility Index (.VIX), also known as a measure of fear on Wall Street, fell to its lowest level since November 2021 during the session.

Investors are looking for signs in corporate results that inflation could drive up costs or hurt consumer spending, amid fears that the economy may be on the cusp of deflation.

S&P 500 companies overall are expected to post a 4.8% drop in first-quarter earnings from the same period a year earlier, according to Refinitiv IBES.

“It looks like we’re stuck in that range, with those people who think there’s going to be a recession coming and those who think there’s going to be a soft landing,” said Rick Meckler, partner at Cherry Lane Investments.

Shares of Netflix Inc (NFLX.O) fell 3.2% after the video streaming pioneer delivered a lighter-than-expected outlook. Shares in rival Disney Co fell 2.2 percent.

Shares of Tesla Inc (TSLA.O) fell 2% after the electric car maker’s sixth price cut in the US this year. Tesla shares fell further in preliminary after-market trading on Wednesday after the company’s quarterly report.

Shares of Elibility Health Inc (ELV.N) fell 5.3% after the insurer’s strong quarterly earnings failed to assuage investor concerns about regulatory blows to the state-backed insurance business. United Health shares fell 3.6 percent.

Elsewhere in healthcare, shares of Abbott Laboratories (ABT.N) jumped 7.8% after the medical device maker said most overdue non-urgent medical procedures had resumed globally three years into the COVID-19 pandemic. Shares of Intuitive Surgical (ISRG.O) rose 10.9% after its revenue and earnings beat quarterly estimates.

Shares of Western Alliance Bancorp (WAL.N) rose 24.1% after the company reported stronger-than-expected earnings, helping to lift the SPDR S&P Regional Banking Index (KRE.P) up 3.9%.

Regional banks have been in focus after the failure of a Silicon Valley bank last month raised concerns about systemic risks.

Declining issues outnumbered NYSE takers 1.28 to 1; On the Nasdaq, the ratio was 1.11 to 1 in favor of declining stocks.

The S&P 500 posted 16 new 52-week highs and 1 new low; The Nasdaq index posted 59 new highs and 123 new lows.

About 10 billion shares changed hands on US exchanges, compared to the daily average of 10.6 billion shares over the last 20 sessions.

Reporting by Sruthi Shankar in Bengaluru, Editing by Vinay Dwivedi

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