S&P, Dow slide after Boeing results; Nasdaq fall cushioned by Microsoft

The S&P 500 and the Dow fell sharply on Wednesday after planemaker Boeing reported a record annual loss, while declines on the Nasdaq were offset by upbeat results from Microsoft.

Boeing Co fell 3% and was among the top drags on the S&P 500 and the Dow Jones Industrial Average after the planemaker took a hefty $6.5 billion charge on its all-new 777X jetliner due to the COVID-19 pandemic and the aftermath of a two-year safety crisis over its 737 MAX.

Declines were across the board in early trading, with 10 of the 11 major S&P 500 sectors in negative territory. Defensive sectors, including consumer staples, were trading higher, while real estate and utilities posted the smallest declines.

The CBOE Market Volatility index, often used as a gauge for investor anxiety, rose 5.63 points, hitting its highest since Jan 4.

In a week packed with quarterly earnings from mega-cap companies, Microsoft Corp gained 3% after its results as the software maker continues to benefit from remote working and learning trends globally.

Microsoft's results set a positive precedent for other technology-related companies including Apple Inc, Tesla Inc and Facebook Inc, which are set to report quarterly numbers later in the day.

These heavyweight majors have recently come back into favor after blowout results from streaming giant Netflix Inc, and as investors dumped economy-linked banks, energy and small-cap stocks.

However, concerns about heightened stock market valuations, raging coronavirus cases and any potential disruption to vaccine rollouts have spooked investors about a pullback and increase in volatility in the near-term.

"The market is kind of in a wait-and-see mode. Investors just want to gather more information from the earnings season, they want more confidence from the Fed, and we should get a big insight into that today," said Craig Erlam, senior market analyst at OANDA.

The Federal Reserve is expected to keep monetary policy locked in crisis-fighting mode at its meeting ending on Wednesday, with investors also looking forward to relief from ongoing vaccinations and new government spending plans.

At 10:07 a.m. ET the Dow Jones Industrial Average was down 429.73 points, or 1.39%, at 30,507.31, the S&P 500 was down 50.36 points, or 1.31%, at 3,799.26, and the Nasdaq Composite was down 141.04 points, or 1.04%, at 13,485.03.

Starbucks Corp fell 5.5% after the coffee chain reported a larger-than-expected fall in quarterly sales, as the renewed surge in coronavirus cases in the US kept customers at home.

Walgreens Boots Alliance Inc jumped 4.9% after the drugstore chain named the outgoing chief operating officer of Starbucks, Roz Brewer, as its CEO.

Videogame retailer GameStop Corp's shares surged another 97.3% on Wednesday, as amateur investors continued to pile into the stock that has skyrocketed nearly 700% over the past two weeks.

Declining issues outnumbered advancers for a 5.36-to-1 ratio on the NYSE and a 6.05-to-1 ratio on the Nasdaq.

The S&P index recorded 24 new 52-week highs and no new low, while the Nasdaq recorded 76 new highs and 15 new lows.