2 Companies Drop After Reporting Strong Results

Investors are worried about outlook for future orders
By Newser Editors and Wire Services
Posted Feb 22, 2023 3:40 PM CST
Stocks End Mixed a Day After Big Drops
Traders work on the floor at the New York Stock Exchange in New York, Wednesday, Feb. 22, 2023.   (AP Photo/Seth Wenig)

Stocks ended mixed a day after falling to their worst loss since December, as Wall Street prepares for interest rates to stay higher for longer. The S&P 500 fell 6.29 points, or 0.2%, to 3,991.05 Wednesday after drifting between small gains and losses. The Dow Jones Industrial Average fell 84.50 points, or 0.3%, to 33,045.09. The Nasdaq composite rose 14.77 points, or 0.1%, to 11,507.07. Treasury yields pulled back a bit after their surge the prior day. Yields have shot higher this month on expectations the Federal Reserve will be more aggressive on interest rates than markets had expected to drive down inflation, the AP reports.

After leaping at the start of the year, stocks have hit a wall in February on worries that inflation may not be cooling as quickly or as smoothly as hoped. That has Wall Street upping its forecasts for how high the Federal Reserve will take interest rates, as well as for how long it will keep them at that level. Minutes from the central bank's last meeting showed policy makers still think inflation is too high despite a recent cooldown and that interest rates need to rise further. A few officials even said they preferred raising rates by 0.5 percentage points at its last meeting, which was double the size of what the Fed actually did.

A relatively lackluster earnings reporting season for big US companies is winding down, and some of Wednesday's biggest losers dropped despite reporting better results for the latest quarter than expected. Charles River Laboratories dropped 10.1% despite topping forecasts for the latest quarter. It said it received a Justice Department subpoena related to shipments of non-human primates that the company received from its supplier in Cambodia. The company said it voluntarily suspended such shipments, which pushed it to cut its forecast for revenue this upcoming year.

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Keysight Technologies tumbled 12.7% for the largest loss in the S&P 500 despite also reporting stronger profit and revenue for the latest quarter than expected. Analysts pointed to its reporting of softer orders than forecast. On the winning side was Diamondback Energy, which rose 2.3% after it reported a stronger profit for its latest quarter than analysts expected. (More stock market stories.)

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