Stocks closed mixed Wednesday as disappointing earnings from Google parent Alphabet (GOOGL (opens in new tab), -9.1%) and Dow component Microsoft (MSFT (opens in new tab), -7.7%) weighed on the major market benchmarks and the tech-heavy Nasdaq Composite in particular.
The blue-chip Dow Jones Industrial Average finished up 0.01% at 31,840, while the broader S&P 500 closed off 0.7% at 3,830. The Nasdaq, under pressure not only from GOOGL and MSFT but also Facebook parent Meta Platforms (META (opens in new tab), -5.6%) and Amazon.com (AMZN (opens in new tab), -4.1%), slumped 2.0% to settle at 10,970.
Markets had been grinding higher since mid-October on an encouraging third-quarter earnings season, but that came to a halt when MSFT and GOOGL reported results after Tuesday’s closing bell. The cloud-computing giant and search king both missed Wall Street’s estimates, hurt by a strong U.S. dollar, decelerating advertising spending and other recessionary pressures. Fear that these same headwinds will derail results from companies yet to report reignited concerns that we could be in the midst of the worst earnings season (opens in new tab) since the height of COVID-19 lockdowns.
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The Best Defensive ETFs to Protect Your PortfolioWednesday’s mixed market action once again demonstrated the importance of defense and diversification. Tech got hammered Wednesday but the Dow held up comparatively well. Indeed, outside of energy – and some select oil and gas stocks (opens in new tab) in particular – every sector of the market is down for the year-to-date. However, within sectors, investors who are overweight dividend stocks (opens in new tab) – especially the top-rated dividend stocks in the Dow (opens in new tab) – are likely beating the broader market this year. Highly rated consumer staples stocks (opens in new tab), which are also known for defense, have been another port in the bear market storm.
Investors can take a do-it-yourself approach to overweighting defensive stocks in their portfolios, or they can go the cheap and easy route of embracing exchange-traded funds to do it for them. Whether we’re talking about low-volatility ETFs (opens in new tab), defensive dividend ETFs or even ETFs that benefit from a strong dollar (opens in new tab), every one of these products has diversification built into it from the ground up. Check out these top defensive ETFs (opens in new tab) to protect your portfolio during these volatile times.