(For a Reuters live blog on U.S., UK and European stock
markets, click or type LIVE/ in a news window.)*Microsoft falls on dismal Q3 cloud outlook*Salesforce, Amazon, other cloud-based stocks drop*Boeing slides after missing Q4 revenue estimates*Indexes down: Nasdaq 1.2%, S&P 0.9%, Dow 0.6%Jan 25 (Reuters) - Wall Street benchmarks dropped on
Wednesday as a decline in technology stocks after Microsoft's
downbeat forecast and a bleak quarterly report from Boeing
fanned fears of a recession.Shares of Microsoft Corp fell 1.2% after it warned
that growth in its lucrative cloud business could stall, while
its PC unit continues to struggle.Amazon.com Inc, Salesforce Inc and
ServiceNow Inc, which have large cloud businesses, fell
about 1% each. The S&P 500 technology index shed 1.3%.Other major growth stocks, including Apple Inc,
Alphabet Inc and Tesla Inc, also dropped
between 0.4% and 3%.Growth stocks, however, have enjoyed a bounce in January
after a battering last year, with investors now focused on
earnings reports to assess the impact of the Federal Reserve's
rate hikes and to gauge whether the renewed enthusiasm for these
stocks will be sustained."One of the most resilient sectors in the economy (tech) is
starting to feel the softness coming through," said Larry Adam,
chief investment officer at Raymond James."Microsoft particularly talked about December - and that's
another shot across the bow to the Fed that they make sure they
do not overtighten and send the economy into a more severe
recession than the one we're getting."An overwhelming majority of traders expect the Federal
Reserve to raise interest rates by another 25 basis points in
its meeting next week.They now see the terminal rate peaking at 4.91% in June,
even as Fed policymakers have repeatedly backed taking rates
above the 5% level.Data later in the week is likely to show December personal
consumption expenditure index (PCE) fell 0.1% from a 0.1% rise
in the prior month. Fourth quarter GDP advance numbers are also
awaited.Dow Jones Industrial Average constituent, Boeing Co
slipped 1.2% as the planemaker's losses widened in 2022
and it missed fourth-quarter revenue estimates.At 12:21 p.m. ET, the Dow was down 208.76 points, or 0.62%,
at 33,525.20, the S&P 500 was down 34.45 points, or
0.86%, at 3,982.50, and the Nasdaq Composite was down
139.09 points, or 1.23%, at 11,195.19.Abbott Laboratories fell 1.9%, weighed down by
lower-than-expected medical device sales in the fourth quarter.In a bright spot, AT&T Inc jumped 5.4% on
higher-than-expected quarterly subscriber additions, while
Textron Inc added 0.9% as its revenue beat estimates.News Corp jumped 6.1%, leading gains on the S&P
500, after Rupert Murdoch withdrew a proposal to reunite News
Corp and Fox Corp.Meanwhile, the New York Stock Exchange said a manual error
triggered a technical issue on Tuesday, preventing the opening
auctions in some listed stocks, leading to widespread confusion
and attracting a review from the U.S. Securities and Exchange
Commission.Declining issues outnumbered advancers for a 2.20-to-1 ratio
on the NYSE and for a 1.92-to-1 ratio on the Nasdaq.The S&P index recorded two new 52-week highs and one new
low, while the Nasdaq recorded 45 new highs and 25 new lows.
(Reporting by Shreyashi Sanyal and Johann M Cherian in
Bengaluru; Additional reporting by Medha Singh; Editing by Vinay
Dwivedi and Anil D'Silva)