Wall Street Today | Microsoft offers strong forecast, lifting shares

U.S. stock indexes tumbled, partly recovered and then retreated again in a second straight day of tumultuous trading, highlighting investor anxiety over the likely path of Federal Reserve interest-rate increases ahead of the central bank's regular meeting.

Tuesday's trading continues a topsy-turvy start to 2022 for stocks, which has dragged the S&P 500 down 8.6%, on track for the worst month since March 2020.

Microsoft reported fiscal second-quarter earnings of $18.8 billion, or $2.48 a share, up from $2.03 a share a year ago, and revenue jumped to $51.73 billion from $43.08 billion a year ago. Analysts on average expected earnings of $2.32 a share on sales of $50.71 billion, according to FactSet.

Shares fell more than 5% in after-hours trading following the release of the results, but reversed to a gain of more than 1% after Chief Financial Officer Amy Hood shared Microsoft's forecast in a conference call Tuesday afternoon.

The Federal Reserve is expected to signal at its meeting this week that it is ready to raise interest rates as soon as March and that it will consider other policy tightening, reversing the easy policies it put in place to fight the pandemic.

The Fed begins its two-day meeting Tuesday, and on Wednesday afternoon, the central bank is expected to issue a new statement that shows it is resolved to fight inflation. Against the backdrop of a violent stock market correction, Fed officials are expected to say they are ready to push up the fed funds rate from zero as soon as March.

The International Monetary Fund's board urged El Salvador to strip Bitcoin of its status as legal currency due to its large risks, highlighting a major obstacle for the nation's efforts to get a loan from the institution.

El Salvador last year sought a $1.3 billion IMF loan, but talks have been stymied by the lender's Bitcoin concerns, and any program would need to be approved by the board.

IMF executive directors, who represent the fund's 190 member nations, highlighted Bitcoin's risks to "financial stability, financial integrity, and consumer protection" and fiscal contingent liabilities, the fund said in a statement Tuesday. They urged the authorities "to narrow the scope of the Bitcoin law by removing Bitcoin's legal tender status."

The price of dogecoin rose 7% on Tuesday, Tesla and McDonald’s representatives didn’t respond to requests for comment.

The Boston conglomerate reported free cash flow from its industrial operations of $3.8 billion, bringing the full-year total to $5.1 billion, and projected 2022 cash flow of $5.5 billion to $6.5 billion. GE plans to split into three separate public companies over the next two years while it navigates the pandemic's impact on its aviation business and supply chain problems.

GE expects that moves the company and its suppliers have made to ease supply-chain problems will benefit the business by midyear, Chief Executive Larry Culp said in an interview Tuesday.

The drugmakers said Tuesday they began enrolling adults ages 18 to 55 in the U.S. and South Africa to examine the safety, tolerability and immune response generated by the vaccine if it is given either as a primary series or as a booster dose.

One subject has already received the shot, Pfizer said.

Initial study results are expected in the first half of the year, Pfizer said. The drugmaker could ask U.S. regulators for authorization and begin distribution in March, should the Omicron-targeted shot prove to work safely, Chief Executive Albert Bourla has said.

YouTube CEO Susan Wojcicki said on Tuesday that the video site will be expanding in ways that can "help creators capitalize" on new technologies like NFTs.

In her annual letter laying out the Google-owned company's priorities, Wojcicki wasn't specific about YouTube's plans, but she made clear the popular video site will be playing in areas that have been heavily hyped of late.

"The past year in the world of crypto, non-fungible tokens (NFTs), and even decentralized autonomous organizations (DAOs) has highlighted a previously unimaginable opportunity to grow the connection between creators and their fans," Wojcicki wrote.