Stocks fell lower on Wednesday as investors weighed a large batch of quarterly earnings and looked ahead toward more mega-cap tech reports and a key labor market report later in the week. The Dow Jones Industrial Average declined over 90 points, while the S&P 500 Index and Nasdaq Composite lost about 0.3% and 0.6%, respectively.
Here's how the market settled on Wednesday:
S&P 500 Index (NYSE: SPY): -0.33% or -19.00 points to 5,813.92
Dow Jones Industrial Average (NYSE: DIA): -0.22% or -91.45 points to 42,141.60
Nasdaq Composite Index (NASDAQ: QQQ): -0.56% or -104.82 points to 18,607.93
On the Earnings Front:
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) reported strong third-quarter earnings late Tuesday, with its cloud revenue notably jumping nearly 35% to $11.35 billion, stemming from its artificial intelligence offerings. Google's search business also rose over 12% year-over-year to $49.4 billion in revenue.
"People are asking longer and more complex questions and exploring a wider range of websites," CEO Sundar Pichai said, speaking on the search engine's AI Overviews -- which now reach 1 billion users on a monthly basis. "What's particularly exciting is that this growth actually increases over time as people learn that Google can answer more of their questions."
Advanced Micro Devices (NASDAQ: AMD) reported in-line third-quarter earnings late Tuesday, even as its data center business doubled its sales for the second quarter in a row. For its current quarter, AMD expects about $7.5 billion, which would represent a 22% year-over-year decline for the December quarter.
"AMD numbers were essentially in line with consensus and our preview, and we were somewhat surprised at the selloff after hours," Morgan Stanley analyst Joseph Moore wrote in a note to clients. "That said, we still see 2024-25 as investment years for the AI opportunity, and think some revenue/earnings expectations are still too high."
Reddit (NYSE: RDDT) shares jumped over 42% on Wednesday after the social media company reported strong third-quarter earnings. The company turned profitable during the quarter, with revenue soaring 68% from a year earlier to a net income of $29.9 million. Reddit expects fourth-quarter revenue between $385 million and $400 million, with adjusted earnings in the range of $110 million to $125 million.
"It was another strong quarter for Reddit and our communities as we achieved important milestones, including new levels of user traffic, revenue growth, and profitability," CEO Steve Huffman said in a statement. "Reddit continues to be one of the most visited and trusted sites in the world with opportunities available to us that aren't available to most companies."
Chipotle Mexican Grill (NYSE: CMG) reported mixed third-quarter earnings late Tuesday, despite the fast casual restaurant chain seeing higher traffic throughout the quarter. Traffic increased 3.3%, while same-stores sales posted a slightly less-than-expected gain of 6%. The company opened 86 new locations in Q3, with 73 of which including a dedicated online order pickup lane called "Chipotlane."
For its full year, Chipotle reiterated its same-store sales growth outlook to increase by a mid- to high-single-digit percentage. The company also expects to open between 285 and 315 new restaurants this year. For 2025, Chipotle plans to open between 315 and 345 new locations, with more than 80% of those restaurants having a Chipotlane.
Eli Lilly (NYSE: LLY) posted disappointing third-quarter earnings on Wednesday, impacted by lackluster sales of its weight loss drug Zepbound and diabetes treatment Mounjaro. The company also cited a $2.8 billion charge in the third-quarter related to its acquisition of Morphic Holdings.
The drugmaker also lowered its full-year outlook, noe guiding for adjusted earnings of between $13.02 and $13.52 per share, down from its prior forecast of $16.10 to $16.60 per share. Eli Lilly also now expects full-year sales of between $45.4 billion and $46 billion, the low-end of its previous guidance for revenue of as much as $46.6 billion.
In Economic News:
Private Payrolls in October rose to their highest level in more than a year, ADP reported Wednesday, despite major labor market disruptions throughout the month. Employers hired 233,000 new workers, the payrolls processing firms said, above September's upwardly revised print of 159,000 and well ahead of expectations. Moreover, wages grew 4.6% annually in October.
"Even amid hurricane recovery, job growth was strong in October," said Nela Richardson, chief economist at ADP, in a statement. "As we round out the year, hiring in the U.S. is proving to be robust and broadly resilient."
In the News:
Super Micro Computer (NASDAQ: SMCI) shares dropped over 30% on Wednesday after the company disclosed its auditor Ernst & Young resigned following disagreements over the firm's governance and board independence. Ernst & Young said in its resignation letter that it was "unwilling to be associated with the financial statements prepared by management."
For Thursday:
Investors will reacts to earnings from companies including Meta Platforms (NASDAQ: META), Microsoft (NASDAQ: MSFT), Starbucks (NASDAQ: SBUX), Coinbase (NASDAQ: COIN), DoorDash (NASDAQ: DASH), Uber (NYSE: UBER), Mastercard (NYSE: MA) and Comcast (NASDAQ: CMCSA) on Thursday, alongside September's personal consumption expenditures (PCE) index reading.