Stocks opened sharply lower Wednesday as investors parsed an onslaught of corporate earnings updates.
Quarterly results from Microsoft (MSFT, -0.6%) drew the most attention, as it is the first of the big tech giants on the earnings calendar. Late Tuesday, the software maker reported top- and bottom-line beats for the final three months of 2022, which initially sent MSFT stock higher in after-hours trading. However, a closer look at the company's guidance sent shares – and the broader market – lower in today's trading.
Taking a closer look at the numbers, Microsoft recorded earnings of $2.32 per share in its fiscal second quarter, down 6.5% year-over-year. Revenue of $52.8 billion was up 2% from the year-ago period, though this marked the slowest sales growth since June 2016. Additionally, Azure cloud revenue grew 31% year-over-year.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"It's no secret that Cloud is front and center for the company right now [and] Azure beat on growth expectations," says David Wagner, portfolio manager at Aptus Capital Advisors. "Everyone knows that growth is slowing in Azure. Investors just want to see that it is slowing less than anticipated. And that's exactly what happened this quarter."
However, in the company's earnings call with analysts, Chief Financial Officer Amy Hood said MSFT expects moderating "business trends that we saw at the end of December" to have likely continued in its fiscal third quarter as corporate spending slows.
"The celebration that Microsoft received from the market ended as the company's CFO delivered her words of caution," says Quincy Krosby, chief global strategist for LPL Financial. "It has been said so many times that corporate guidance during this fourth-quarter earnings season is crucial for understanding the direction of the market, especially amid a backdrop of weakening economic data."
And for today, that direction was mostly lower. While stocks finished well off their lows, the Nasdaq Composite ended the day down 0.2% at 11,313, and the S&P 500 was off 0.02% at 4,016. The Dow Jones Industrial Average, however, managed to eke out a marginal gain to 33,743.
The Newest Dividend Aristocrats
It was a big day for devout followers of the Dividend Aristocrats – an illustrious group of S&P 500 components that have raised their dividends every year for at least the last 25 straight. The Standard & Poor's annual rebalancing of the S&P 500 Dividend Aristocrats resulted in three new members, effective prior to the Feb. 1 market open, including well-known consumer staples stock J.M. Smucker (SJM).
While this announcement is certainly welcome news for income seekers, investors of all stripes should be focused on dividend-paying names – especially in today's volatile market. "Dividend income, an important element of total return, is often overlooked amid gyrations in the stock market," say John Eade, president and director of Portfolio Strategies, and Jim Kelleher, director of Research at Argus. And dividend-growth stocks, in particular, "tend to hold their value better in periods of rising rates and deliver solid total returns in all markets." With that in mind, here are the best dividend stocks investors can count on for dividend growth.
-
Markets Are Quiet Ahead of Fed Day: Stock Market TodayInvestors, traders and speculators appear to be on hold amid an unusually fraught Fed meeting.
-
Quiz: Test Your Knowledge of the OBBB, Wealth Transfer and Early RetirementQuiz The financial professionals who contribute to Kiplinger's Adviser Intel recently wrote about the OBBB's impact on retirement, how to ensure your wealth passes to your family and early retirement questions.
-
Markets Are Quiet Ahead of Fed Day: Stock Market Today
Investors, traders and speculators appear to be on hold amid an unusually fraught Fed meeting.
-
Stocks Rise to Start Fed Week: Stock Market TodayThe Nasdaq Composite and S&P 500 hit new record closing highs as Wall Street awaits the Fed's next rate cut.
-
S&P 500 Slips Ahead of Fed Week: Stock Market TodayAll eyes are on the Federal Reserve ahead of next week's critical policy meeting.
-
Dow Gains 617 Points as Rate Cuts Near: Stock Market TodayWednesday's economic data didn't shift Wall Street's expectations that the Fed is preparing for a rate cut at next week's meeting.
-
S&P 500 Hits New High After Oracle Earnings: Stock Market TodayAnother down day for Apple held the Dow Jones Industrial Average back, though.
-
Stocks Grind Up to New All-Time Highs: Stock Market TodayUnitedHealth stock led the Dow Jones Industrial Average amid increasing signs the labor market has not been well for months.
-
Markets Prepare for August Inflation Data: Stock Market TodayApple CEO Tim Cook is still important, but price action this week is as much about incoming inflation data ahead of next week's Fed meeting.
-
Stocks Slip as Job Growth Stalls: Stock Market TodayThe August jobs report came in much weaker than expected, while the unemployment rate ticked higher.
