Wall St: Nasdaq slides 3% as megacap stocks bashed ahead of earnings

The tech-heavy Nasdaq led Wall Street lower on Tuesday with a 3% slump, as nerves ahead of earnings from megacap growth and technology companies added to concerns over slowing global growth and a more aggressive Federal Reserve.

Market-leading growth stocks have been hammered this year as investors fret over the impact of higher interest rates on their future earnings, while China's COVID-19 led lockdown and hawkish pivot by major central banks have overshadowed what has been a better-than-expected earnings season so far.

Growth-oriented sectors such as technology .SPLRCT, communication services .SPLRCL and consumer discretionary .SPLRCD tumbled between 2.8% and 4.1%, the biggest losers among the 11 major S&P 500 sectors.

Alphabet Inc GOOGL.O and Microsoft Corp MSFT.O slid 3.4% and 2.9%, respectively, ahead of their results after the closing bell on Tuesday. About a third of the S&P 500 companies are set to report results this week.

"If the earnings and forecasts are bad, we could be in for much bigger pain. The earnings of those big ones are going to set the tone," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

"In addition to war concerns, you have COVID concerns which could affect the supply chain. China is such a major supplier, particularly to some of these tech companies. That could be a big problem, so investors are watching that one carefully."

The United States and allies pledged new packages of ever heavier weapons for Ukraine during a meeting on Tuesday, brushing off a threat from Moscow that their support for Kyiv could lead to nuclear war. Read full story

The S&P 500 energy sector .SPNY rose 2.1% as oil prices rebounded following reports that Russian gas supplies to Poland were halted. Read full story

At 11:36 a.m. ET, the Dow Jones Industrial Average .DJI was down 530.97 points, or 1.56%, at 33,518.49, the S&P 500 .SPX was down 81.69 points, or 1.90%, at 4,214.43, and the Nasdaq Composite .IXIC was down 394.64 points, or 3.03%, at 12,610.21.

Twitter TWTR.N fell 3%, a day after the social media platform agreed to sell itself to Tesla Inc TSLA.O chief Elon Musk, while Tesla dropped 9.5% . Read full story

Of the 134 companies in the S&P 500 that reported earnings so far, 80.6% topped analysts' profit expectations, according to Refinitiv data. In a typical quarter, 66% beat estimates.

General Electric Co GE.N fell 11.6% after forecasting full-year earnings at the low end of its previous estimate. Read full story

United Parcel Service Inc UPS.N slipped 3.9% despite reporting a rise in quarterly adjusted profit, while U.S. hospital operator Universal Health Services Inc UHS.N slumped 9.1% after its earnings missed estimates. Read full storyRead full story

Meanwhile, data showed U.S. consumer confidence edged lower in April, though households planned to buy automobiles and many appliances, which should help underpin consumer spending in the second quarter. Read full story

Declining issues outnumbered advancers for a 3.01-to-1 ratio on the NYSE and a 4.08-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week highs and 34 new lows, while the Nasdaq recorded 18 new highs and 464 new lows.