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S&P 500, Dow hit multi-week lows

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Visa falls after missing revenue growth forecasts

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AT&T ( T ) rises after beating subscriber-addition estimates

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Enphase Energy ( ENPH ) up after results

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Indexes down: Dow 0.85%, S&P 1.61%, Nasdaq 2.55%

(Updated at 11;42 a.m. ET/ 1542 GMT)

By Ankika Biswas and Lisa Pauline Mattackal

July 24 (Reuters) -

The Nasdaq plummeted to a one-month low on Wednesday after

Tesla and Alphabet disappointed with lackluster earnings,

prompting investors to question if the Big Tech and AI-fueled

2024 equity rally was sustainable in the long run.

Tesla slumped 11%, set to lose around $83 billion

in market value at current levels from Tuesday's close, if

losses hold, after the EV maker reported its lowest profit

margin in more than five years and missed second-quarter

earnings estimates.

Google parent Alphabet, too, shed 4.6% despite a

second-quarter earnings beat, as investors focused on an

advertising growth slowdown and the company flagged high capital

expenses for the year.

Tesla and Alphabet dragged the S&P 500 Communication

Services and Consumer Discretionary sector

indexes down more than 3% each.

"There was obviously nothing positive (in the results)

and this market requires something to exceed expectations to

keep itself going," said Tom Plumb, chief executive and

portfolio manager at Plumb Funds.

Alphabet's losses underscored the high earnings bar for

the so-called Magnificent Seven, a set of megacap tech stocks

that have notched double- and triple-digit percentage gains so

far in 2024, riding on the optimism around AI adoption and

expectations of an early start to the Federal Reserve's

interest-rate cuts.

"I can't help thinking (that) if the tech sector does

sneeze, the whole market could catch it," said David Morrison,

senior market analyst at TradeNation.

The benchmark S&P 500 dropped to a three-week low, pulled

down by a 3% drop each in Apple ( AAPL ), Microsoft ( MSFT ),

Amazon.com ( AMZN ), Meta Platforms ( META ) and Nvidia ( NVDA )

.

The blue-chip Dow hit a nearly two-week low, with

Visa dropping 4% after its third-quarter revenue growth

fell short of expectations.

Chary of the high valuation of these companies, market

participants started shifting to underperforming sectors in

mid-July.

S&P 500 stocks, on average, are trading at a 21.4

price-to-earnings ratio, compared with the historical average of

15.9, LSEG data showed. Of the index companies that have

reported second-quarter earnings to date, 78.9% have beaten

results estimates.

In economic data, S&P Global's flash U.S. Composite PMI

Output Index showed business activity climbed to a 27-month high

in July.

Friday's release of the personal consumption

expenditures numbers, the U.S. Fed's preferred inflation

measure, will be the week's most closely watched economic data.

Traders largely expect a 25-basis-point rate cut by

September and two cuts this year, according to LSEG data.

At 11:42 a.m. ET, the Dow Jones Industrial Average

was down 342.79 points, or 0.85%, at 40,015.30, the S&P 500

was down 89.56 points, or 1.61%, at 5,466.18, and the

Nasdaq Composite was down 459.67 points, or 2.55%, at

17,537.68.

Among others, AT&T ( T ) gained 4.9% after beating forecasts

for wireless subscriber additions, while solar inverter maker

Enphase Energy ( ENPH ) jumped 14.7% after a second-quarter

operating profit beat.

Declining issues outnumbered advancers for a 1.60-to-1 ratio

on the NYSE, and for a 1.50-to-1 ratio on the Nasdaq.

The S&P index recorded 13 new 52-week highs and six new

lows, while the Nasdaq recorded 112 new highs and 66 new lows.