By Yasin Ebrahim
Investing.com - The Dow fell Wednesday, as sea of red swept through Wall Street on mostly weaker quarterly earnings ahead of an update on monetary policy from the Federal Reserve later today.
The Dow Jones Industrial Average rose 0.05%, or 15 points. The S&P 500 was up 0.06%, while the Nasdaq Composite gained 0.48%.
Major Dow component Boeing (NYSE:BA) fell more than 4% following a wider than expected quarterly loss of $15.25 per share. The loss was largely driven by an $8.3 billion hit relating the ground of the 737 Max and a delay in the 777-X program.
Starbucks (NASDAQ:SBUX) slumped more than 6% as the coffee chain reported U.S. same-store sales fell 5% in its fiscal first quarter owing to the impact of further restrictions to curb the spread of the virus.
Chipmakers were also under pressure, down more than 2%, paced by weakness in Advanced Micro Devices (NASDAQ:AMD) despite posting better-than-expected earnings of 52 cents per share.
Microsoft (NASDAQ:MSFT), however, bucked the trend, rising more than 1% after reporting earnings of $2.04 a share that markedly beat analyst estimates thanks to growth in its cloud business Azure.
The slew of earnings come ahead of quarterly reports from Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB) and Tesla (NASDAQ:TSLA) due after the markets close on Wednesday.
Heading into Tesla's report, analysts have earmarked guidance on deliveries as key to further support the electric vehicle's growth story.
"A positive guide on 2021 deliveries, combined with commentary that will reinforce the growth narrative, could serve as a positive catalyst for the stock, even despite its robust valuation," Credit Suisse (SIX:CSGN) said in a note.
Energy was the only sector in the green as oil prices turned positive as data showed weekly U.S. crude stockpiles unexpectedly dropped.
Investor attention was also captivated by an ongoing short-squeeze on Wall Street, led by a cohort of mainly retail traders, coalescing on Reddit forums, who appear to bidding on stocks with short-interest that exceeds the float.
Melvin Capital and Citron Research, both of whom were sellers of Gamestock, were forced to close positions on the video game retailer's shares with huge losses following a more than 700% rally in the stock.
AMC Entertainment (NYSE:AMC) short sellers were also caught up in squeeze as the stock rallied more than 200%
Monetary policy is on the agenda later at 2:00 PM ET (1800 GMT) as the Federal Reserve is set to reveal its monetary policy decision.
As the Fed is likely to stand pat on monetary policy, investor attention will focus on remarks from Fed Chairman Jerome Powell on the economy and monetary policy.