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Alphabet shares dive after Google AI chatbot Bard flubs answer
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Investors digest comments from Fed officials
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CVS Health rises on offer to buy Oak Street
(Updates to close)
By Caroline Valetkevitch
NEW YORK, Feb 8 (Reuters) - U.S. stocks ended down on
Wednesday, paring most of the strong gains of the previous
session, with tech-focused shares leading the way lower.
The biggest drag on the S&P 500 and Nasdaq was Alphabet , whose shares dropped after its new AI chatbot Bard
delivered an incorrect answer in an online advertisement.
Adding to the downbeat mood in stocks, Federal Reserve
officials on Wednesday said more interest rate rises are in the
cards as the U.S. central bank moves ahead with efforts to
control inflation.
Fed Governor Christopher Waller said inflation seems
poised to continue slowing this year but the U.S. central bank's
battle to reach its 2% target "might be a long fight" with
monetary policy kept tighter for longer than anticipated.
Stocks rallied on Tuesday following Fed Chair Jerome
Powell's session before the Economic Club of Washington, where
he said interest rates might need to move higher than expected
if the U.S. economy remained strong, but said he felt a process
of "disinflation" is under way.
"After this kind of run and a move to a valuation certainly
in the richer camp, you need to have more evidence to keep the
market climbing higher," said Quincy Krosby, chief global
strategist at LPL Financial in Charlotte, North Carolina.
The Nasdaq remains up about 14% for the year to date.
According to preliminary data, the S&P 500 lost 45.50 points, or 1.11%, to end at 4,117.91 points,
while the Nasdaq Composite lost 201.60 points, or 1.66%,
to 11,912.19. The Dow Jones Industrial Average fell 202.51 points, or 0.59%, to 33,954.18.
Investors have been concerned about how aggressive the Fed's
actions may be this year following Friday's surprisingly strong
U.S. jobs report.
They have also been concerned about mixed reports from U.S.
companies this earnings season. With results in from more than
half of the S&P 500 companies, earnings still are expected to
have declined year-over-year in the fourth quarter of 2022,
according to IBES data from Refinitiv.
Shares of entertainment company Walt Disney were
little changed ahead of its quarterly results due after the
closing bell.
Investors also were digesting comments from President Joe Biden late Tuesday at the State of the Union address, supporting calls to tax corporate share buybacks. CVS Health Corp were up after its $9.5 billion cash buyout offer for Oak Street Health Inc . Oak Street Health shares also rose. (Reporting by Caroline Valetkevitch in New York; additional reporting by Johann M Cherian, Shubham Batra and Shreyashi Sanyal in Bengaluru; Editing by Marguerita Choy)
