Stocks fell lower on Wednesday as more disappointing economic data and corporate news weighed on market sentiment as investors fear a potential recession. The Dow Jones Industrial Average fell over 600 points, while the S&P 500 Index and Nasdaq Composite lost 1.6% and 1.2%, respectively.
Here's how the market settled on Wednesday:
S&P 500 Index (NYSE: SPY): -1.56% or -62.11 points to 3,928.86
Dow Jones Industrial Average (NYSE: DIA): -1.81% or -613.89 points to 33,296.96
Nasdaq Composite Index (NASDAQ: QQQ): -1.24% or -138.10 points to 10,957.01
In the spotlight on Wednesday, Microsoft (NASDAQ: MSFT) announced plans to lay off about 10,000 employees as the software maker grapples with slowing revenue growth. The job cust are expected to take place through March 31 and the company expects to take a $1.2 billion charge.
"I'm confident that Microsoft will emerge from this stronger and more competitive," said CEO Satya Nadella in a memo posted on Microsoft's website.
On the economic front, the U.S. Commerce Department reported Wednesday that retail sales fell 1.1% in December from November's downwardly revised reading. Economists had expected sales to only decline 0.8% last month.
Meanwhile, the U.S. Bureau of Labor Statistics reported that the Producer Price Index (PPI) for December fell by a more-than-expected 0.5%, marking the biggest decline for the inflation gauge since the pandemic. Headline PPI rose at an annual 6.2% clip last month, declining year-over-year from November's reading of 7.3%.
For stocks, United Airlines (NASDAQ: UAL) shares fell about 5% despite the air carrier's better-than-expected earnings report and its new upbeat outlook announced on Wednesday. In a filing, United said it expects to expand flying by 20% in the first quarter from a year ago.
Moderna (NASDAQ: MRNA) shares rose on Wednesday after the biotech company announced results from a late-stage clinical trial for its RSV vaccine was effective at preventing the respiratory disease in older adults. The company expects to file an application for U.S. Food and Drug Administration approval in the first half of this year.
IBM (NYSE: IBM) shares fell Wednesday after Morgan Stanley (NYSE: MS) analyst Erik Woodring lowered the firm's rating of the tech company to Equal Weight from Overweight.
"Should our 2023 Industry Outlook prove correct, and early cycle dynamics emerge in mid 2023, we see risk to outperformance given the stock is trading near-record highs and IBM historically underperforms IT Hardware and its peers in an early cycle environment," Woodring wrote in a note.
Looking ahead, all eyes will be on Netflix's (NASDAQ: NFLX) earnings report due out Thursday for signs of how the tech sector is responding to persistently high inflation.