Stocks were mostly down on Wednesday as Wall Street struggled to extend its rally despite another strong run of corporate earnings.
The Nasdaq Composite fell 0.7%. The S&P 500 fell 0.6%. The Dow slipped 83 points, or 0.3%. All three averages oscillated between gains and losses in morning trading.
The tepid moves came even as Netflix shares rose 15% after the streaming giant posted better-than-expected earnings and revenue along with strong subscriber growth in the third quarter. United Airlines climbed more than 7% after also beating estimates on the top and bottom results.
The strong start to the earnings season comes as many Wall Streets have lowered their earnings forecasts and investors worry about a recession. Even though stocks rallied in the first two days of the week, Treasury yields remain high and rose on Wednesday, suggesting recession fears are still intact.
The 10-year Treasury yield jumped to 4.1% on Wednesday.
“On the positive side, the corporate earnings season may boost investor confidence somewhat, given the current oversold conditions and reduced expectations. This should help equities stay on course, but until we see 2- and 10-year yields start to decline, we believe traders and investors should remain cautious and not expect too much from this rally,” said Nick Colas of DataTrek Research.
Among the Nasdaq’s biggest losses was Chinese tech stock JD.com, which fell more than 4%. Abbott Labs was one of the worst performers in the S&P 500, falling more than 7% despite third-quarter expectations.
Tech earnings will be in full swing next week, but IBM and Tesla are on deck to report on Wednesday. Social media company Snap will report later in the week.
In economic data, investors are eagerly awaiting housing starts on Wednesday. The Federal Reserve’s so-called Beige Book, the central bank’s report on the current state of economic conditions, will also be released.
Wednesday’s moves came after another strong day for stocks, with the Dow Jones gaining around 337 points on Tuesday and the S&P 500 gaining 1.1%.