Day Traders Diary

4/26/23

The major averages closed mixed in better than expected earnings from tech stocks like Microsoft coupled with disappointing results from regional banks like First Republic Bank. The Dow Jones Industrial Average fell 228 points after rising over 200 points this morning. The S&P 500 fell 14 points while the Nasdaq rose 55 points.

Regional bank, First Republic Bank slid nearly 30%, extending losses after falling almost 50% on Tuesday. The regional bank said late Monday that its deposits dropped 40% to $104.5 billion in the first quarter.

That reignited concerns about the health of the banking system initially prompted by the closure of Silicon Valley Bank last month. Bloomberg News reported Wednesday that U.S. bank regulators were considering downgrading their assessments of First Republic, which could hinder the bank's ability to borrow from the Federal Reserve.

Microsoft climbed more than 7% to trade at its highest point in more than a year after beating Wall Street's expectations on the top and bottom lines in its latest quarter. The company also said it saw a big jump in revenue from its Intelligent Cloud business segment. Amazon rose more than 2% as some market participants grew hopeful that the e-commerce giant's cloud business could also show strong revenue growth.

Alphabet shares finished down 0.1% after trading up earlier in the day. The Google parent posted better-than-anticipated earnings but said revenue grew just 3% from the same period a year ago.

Still, the Technology Select Sector SPDR Fund (XLK) added about 1.5% as investors increased exposure in the thick of Big Tech's marquee earnings week. Meta Platforms advanced 0.9% ahead of the Facebook parent's earnings report coming after the market closes. Amazon's quarterly report is due after the bell on Thursday.

Chipotle shares jumped nearly 13% to an all-time high on the back of strong earnings.

On the economic front, demand for long-lasting goods like appliances and computers was higher than economists expected in March, according to data released Wednesday morning, in a sign that the economy is showing resilience. This data point comes ahead of the latest GDP update slated for Thursday and the big Personal Consumption Expenditures Price Index — the Fed's favored inflation gauge — on Friday.