By Yasin Ebrahim
Investing.com — The S&P 500 struggled for direction Tuesday, after a Goldman-Sachs-led wobble in financials after the Wall Street bank giant reported quarterly results that fell short of estimates.
The S&P 500 fell 0.06%, the Dow Jones Industrial Average slipped 0.93%, or 317 points, and the Nasdaq Composite was up 0.22%.
Goldman Sachs Group (NYSE:GS) fell more than 6% after its fourth-quarter results missed estimates amid rising costs, weakness in its consumer banking business and a 48% slump in investment banking revenues.
Morgan Stanley (NYSE:MS), however, rallied more than 6% after delivering better-than-expected fourth-quarter results as record revenue in its wealth management business offset weakness in investment banking amid lower deal-making activity.
Communication services also pressured the broader market, paced by a decline in media stocks including Verizon Communications (NYSE:VZ), Warner Bros Discovery (NASDAQ:WBD), and Netflix (NASDAQ:NFLX).
Ahead of the Netflix’s quarterly results due Thursday, UBS said it expected the streaming giant’s fourth-quarter subscriber growth tracked in-line with management’s guide amid a “strong content slate & seasonality.”
Netflix is expected to add about 4.5 million subscribers in Q4, up from 2.4M in the prior quarter, but down from 8.3M in Q4 last year.
Snap (NYSE:SNAP) fell nearly 3% after JMP Securities downgraded the social media company to market perform from market outperform, citing softer engagement and increased competition.
Big tech was also mostly lower, with Apple (NASDAQ:AAPL) the exception, after the tech company announced the launch of its new Macbook pro featuring its advanced M2 chip and a 22-hour battery.
Microsoft (NASDAQ:MSFT) cut gains as Guggenheim downgraded the stock to sell from neutral, on worries that the company’s guidance for the second quarter and the full year may fall short of Wall Street estimates.
Tesla (NASDAQ:TSLA) rallied 6% as Deutsche Bank “strongly” reiterated its buy rating on the company on expectations that the recent price cuts will likely help underpin the electric vehicle maker’s volume growth.
“[W]e believe this likely is a bold offensive move, which secures Tesla’s volume growth, puts its traditional and EV competitors in great difficulty, and showcases Tesla’s considerable pricing power and cost superiority,” Deutsche Bank said.
Crypto-related stocks including Riot Blockchain Inc (NASDAQ:RIOT), Marathon Digital (NASDAQ:MARA) were also in the ascendency as bitcoin added to recent gains to extend its winning streak.
On the economic front, the New York Fed’s Empire State business conditions index, a measure of activity in the New York state, fell to -32.9 in January, the worst reading since the pandemic.