S&P 500 and Nasdaq Plummet to Multi-Week Lows as Tesla and Alphabet Earnings Disappoint

S&P and Nasdaq close at multi-week lows as Tesla, Alphabet weigh heavily

The S&P 500 and Nasdaq reached multi-week lows after disappointing earnings from Alphabet and Tesla. Investor confidence in megacap stocks was shaken, causing significant declines in both indices. The S&P 500 saw its worst performance since December 2022, while the Nasdaq had its biggest drop since October 2022. The Dow also posted a notable decrease.The S&P 500 and Nasdaq ended at multi-week lows on Wednesday, with the S&P snapping one of its longest streaks without a daily decline of more than 2%, as lackluster Alphabet and Tesla earnings undermined investor confidence in megacap names. As the first of the Magnificent Seven stocks reported quarterly numbers, investors had been awaiting new data to see if lofty valuations were justified. With these seven companies having such sway over markets, their performance was bound to have wide repercussions. Investor reactions to the numbers contributed to the benchmark S&P 500 posting its worst one-day performance since December 2022. Its 2.3% fall marked the first time it had closed more than 2% off in 356 sessions, its longest streak since 2007. The Nasdaq Composite was also beaten down, posting its largest single-day percentage decline since October 2022 to finish at its lowest point since June 10. Meanwhile, the Dow Jones Industrial Average closed below 40,000 points for the first time in two weeks. Dave Grecsek, managing director in investment strategy and research at Aspiriant, noted that the upward momentum of the first two weeks of July in equity markets had now disappeared over the last week. "There's a little bit of profit-taking, and then people are a little apprehensive about earnings announcements upcoming," he said. Tesla weighed heavily on Wednesday, slumping 12.3% in its worst single-day fall since September 2020. This came after the electric-vehicle maker reported its lowest profit margin in more than five years and missed second-quarter earnings estimates. Google parent Alphabet dropped 5%, to its worst finish since May 31, 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 by 3.8% and 3.9% respectively, with the Consumer Discretionary index posting its largest single-day decline since September 2022. Information Technology was the weakest performer of the 11 S&P sectors though, and its 4.1% decline was its largest daily drop since October 2022. 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 in 2024, riding on optimism around AI adoption and expectations of an early start to the Federal Reserve's interest-rate cuts. "When you put everything in an earnings context, you can really understand why those Mag 7 stocks have been performing so great because the earnings have been there," said Grecsek. Any doubts, however, about the stocks meeting expectations will induce selling pressure. The other megacaps, Apple , Microsoft, Amazon.com, Meta Platforms and Nvidia, all closed down between 2.9% and 6.8%. Meanwhile, the blue-chip Dow did not escape the negativity. Visa was among the stocks that weighed on it, dropping 4% after its third-quarter revenue growth fell short of expectations. As stocks tumbled, the Cboe Volatility Index - known as Wall Street's fear gauge - closed at 18.04, the highest since April 19. The S&P 500 lost 128.61 points, or 2.31%, to 5,427.13 points, while the Nasdaq lost 654.94 points, or 3.64%, to 17,342.41. The Dow Jones Industrial Average fell 504.22 points, or 1.25%, to 39,853.87. Among others, AT&T gained 5.2% after beating forecasts for wireless subscriber additions, while solar inverter maker Enphase Energy jumped 12.8% after reporting a second-quarter operating profit beat. Meanwhile, Roper Technologies dropped 7.4% after it signaled third-quarter profit would fall below estimates. Boston Scientific traded 1.1% down, despite lifting its 2024 profit target and beating second-quarter earnings estimates. Volume on U.S. exchanges was 12.94 billion shares, compared with the 11.48-billion average for the full session over the last 20 trading days.

S&P and Nasdaq fall to multi-week lows as Tesla, Alphabet weigh

* Visa falls after missing revenue growth forecasts * AT&T rises after beating subscriber-addition estimates July 24 (Reuters) - The S&P 500 and Nasdaq slumped to multi-week lows 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. As the first of the Magnificent Seven stocks reported quarterly numbers, investors had been awaiting new data to see if lofty valuations were justified. With these seven companies having such sway over markets, their performance was bound to have wider repercussions. The benchmark S&P 500 touched its lowest since July 1, and the tech-heavy Nasdaq Composite fell to a six-week low. Tesla weighed heavily, slumping 11.2% and set to lose more than $80 billion in market value at current levels from Tuesday's close, if losses hold. The electric-vehicle maker reported its lowest profit margin in more than five years and missed second-quarter earnings estimates. Google parent Alphabet shed 4.9% 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 3.2% each. Information Technology was the weakest performer of the 11 S&P sectors, tumbling 3.5% to a six-week low. "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 in 2024, riding on 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 Trade Nation. The other megacaps were also trading lower, with Apple , Microsoft, Amazon.com, Meta Platforms and Nvidia all down between 2.6% and 5.2%. Meanwhile, the blue-chip Dow hit a nearly two-week low, with Visa dropping 3.7% after its third-quarter revenue growth fell short of expectations. At 02:04 p.m. ET, the S&P 500 lost 100.20 points, or 1.80%, to 5,455.54 points, while the Nasdaq lost 539.51 points, or 3.00%, to 17,457.05. The Dow Jones Industrial Average fell 343.79 points, or 0.85%, to 40,014.30. 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. A rotation into smaller-cap stocks has also been eyed, although they did not escape the ripples the megacaps caused: the Russell 2000 was down 0.5%. 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. Among others, AT&T gained 4.9% after beating forecasts for wireless subscriber additions, while solar inverter maker Enphase Energy jumped 13.2% after reporting a second-quarter operating profit beat. Meanwhile, Roper Technologies was set for its worst day in four years, dropping 8.6%, after it signaled third-quarter profit would fall below estimates. Boston Scientific traded 0.8% down, despite lifting its 2024 profit target and beating second-quarter earnings estimates. (Reporting by Ankika Biswas and Lisa Mattackal in Bengaluru and David French in New York; Editing by Varun H K, Pooja Desai and Rod Nickel)

S&P and Nasdaq close at multiweek lows as Tesla, Alphabet weigh heavily

President Biden and former President Trump confront each other over the economy. The S&P 500 and Nasdaq closed at multiweek lows Wednesday, as lackluster earnings from Tesla and Alphabet undermined investor confidence in megacap tech names that had previously driven 2024's equity rally. As the first of the Magnificent Seven stocks reported quarterly numbers, investors had been awaiting new data to see if lofty valuations were justified. With these seven companies having such sway over markets, their performance was bound to have wider repercussions. Investor reactions pushed both the benchmark S&P 500 and the Nasdaq composite to their lowest finishes since June. Meanwhile, the Dow Jones Industrial Average closed below 40,000 points for the first time in two weeks. Dave Grecsek, managing director in investment strategy and research at Aspiriant, noted the upward momentum of the first two weeks of July in equity markets had disappeared over the last week. "There's a little bit of profit-taking, and then people are a little apprehensive about earnings announcements upcoming," he said. Tesla weighed heavily Wednesday, slumping after the electric-vehicle maker reported its lowest profit margin in more than five years and missed second-quarter earnings estimates. Google parent Alphabet dropped 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, with Information Technology also among the weakest performers of the 11 S&P sectors. 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 in 2024, riding on optimism around AI adoption and expectations of an early start to the Federal Reserve's interest-rate cuts. "When you put everything in an earnings context, you can really understand why those Mag 7 stocks have been performing so great because the earnings have been there," said Grecsek. Any doubts, however, about the stocks meeting expectations will induce selling pressure. The other megacaps, Apple, Microsoft, Amazon.com, Meta Platforms, and Nvidia, all closed down. Meanwhile, the blue-chip Dow, did not escape the negativity. Visa was among the stocks that weighed on it, dropping after its third-quarter revenue growth fell short of expectations. According to preliminary data, the S&P 500, lost 128.10 points, or 2.31%, to end at 5,427.64 points, while the Nasdaq composite lost 654.94 points, or 3.64%, to 17,342.41. The Dow Jones Industrial Average fell 499.21 points, or 1.24%, to 39,858.88. 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. A rotation into smaller-cap stocks has also been eyed, although they did not escape the ripples the megacaps caused: the Russell 2000 finished down. 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. Among others, AT&T gained after beating forecasts for wireless subscriber additions, while solar inverter maker Enphase Energy jumped after reporting a second-quarter operating profit beat. Meanwhile, Roper Technologies dropped after it signaled third-quarter profit would fall below estimates. Boston Scientific traded down, despite lifting its 2024 profit target and beating second-quarter earnings estimates.

S&P 500 and Nasdaq dive to multi-week lows on lacklustre Alphabet and Tesla earnings

The S&P 500 and Nasdaq ended at multi-week lows on Wednesday, with the S&P snapping one of its longest streaks without a daily decline of more than 2%, as lackluster Alphabet and Tesla earnings undermined investor confidence in megacap names. As the first of the Magnificent Seven stocks reported quarterly numbers, investors had been awaiting new data to see if lofty valuations were justified. With these seven companies having such sway over markets, their performance was bound to have wide repercussions. Investor reactions to the numbers contributed to the benchmark S&P 500 posting its worst one-day performance since December 2022. Its 2.3% fall marked the first time it had closed more than 2% off in 356 sessions, its longest streak since 2007. The Nasdaq Composite was also beaten down, posting its largest single-day percentage decline since October 2022 to finish at its lowest point since June 10. Meanwhile, the Dow Jones Industrial Average closed below 40,000 points for the first time in two weeks. Dave Grecsek, managing director in investment strategy and research at Aspiriant, noted that the upward momentum of the first two weeks of July in equity markets had now disappeared over the last week. "There's a little bit of profit-taking, and then people are a little apprehensive about earnings announcements upcoming," he said. Tesla weighed heavily on Wednesday, slumping 12.3% in its worst single-day fall since September 2020. This came after the electric-vehicle maker reported its lowest profit margin in more than five years and missed second-quarter earnings estimates. Google parent Alphabet dropped 5%, to its worst finish since May 31, 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 by 3.8% and 3.9% respectively, with the Consumer Discretionary index posting its largest single-day decline since September 2022. Information Technology was the weakest performer of the 11 S&P sectors though, and its 4.1% decline was its largest daily drop since October 2022. 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 in 2024, riding on optimism around AI adoption and expectations of an early start to the Federal Reserve's interest-rate cuts. "When you put everything in an earnings context, you can really understand why those Mag 7 stocks have been performing so great because the earnings have been there," said Grecsek. Any doubts, however, about the stocks meeting expectations will induce selling pressure. The other megacaps, Apple , Microsoft, Amazon.com, Meta Platforms and Nvidia, all closed down between 2.9% and 6.8%. Meanwhile, the blue-chip Dow did not escape the negativity. Visa was among the stocks that weighed on it, dropping 4% after its third-quarter revenue growth fell short of expectations. As stocks tumbled, the Cboe Volatility Index - known as Wall Street's fear gauge - closed at 18.04, the highest since April 19. The S&P 500 lost 128.61 points, or 2.31%, to 5,427.13 points, while the Nasdaq lost 654.94 points, or 3.64%, to 17,342.41. The Dow Jones Industrial Average fell 504.22 points, or 1.25%, to 39,853.87. Among others, AT&T gained 5.2% after beating forecasts for wireless subscriber additions, while solar inverter maker Enphase Energy jumped 12.8% after reporting a second-quarter operating profit beat. Meanwhile, Roper Technologies dropped 7.4% after it signaled third-quarter profit would fall below estimates. Boston Scientific traded 1.1% down, despite lifting its 2024 profit target and beating second-quarter earnings estimates. Volume on U.S. exchanges was 12.94 billion shares, compared with the 11.48-billion average for the full session over the last 20 trading days. (Reporting by Ankika Biswas and Lisa Mattackal in Bengaluru and David French in New York; Editing by Varun H K, Pooja Desai and Rod Nickel) SHARE Copy linkEmailFacebookTwitterTelegramLinkedInWhatsAppReddit Published on July 25, 2024

S&P 500 Gains and Losses Today: Index Skids as Tesla, Alphabet Results Underwhelm

Enphase Energy moved higher after the solar equipment provider issued upbeat guidance. Major U.S. equities indexes tumbled as underwhelming earnings reports from Tesla (TSLA) and Google parent Alphabet (GOOGL) raised doubts about the sustainability of the rally in big-name tech stocks. Strength in the tech sector has been key to the ascent of the market gauges to their recently recorded record highs. The S&P 500 dropped 2.3% on Wednesday, while the tech-heavy Nasdaq plunged 3.6%, marking the weakest performance for both indexes so far this year. The Dow closed the session 1.3% lower. The sharpest losses in the S&P 500 belonged to shares of Lamb Weston Holdings (LW), which plummeted 28% after it reported weaker-than-expected revenue and earnings per share (EPS) for its fiscal fourth quarter. The manufacturer of frozen potato products cited declining restaurant traffic in the U.S. and key international markets amid higher menu prices as a reason for the lackluster performance. The company also guided for fiscal 2025 sales and profits falling below consensus estimates. Tesla shares fell 12% after the electric vehicle maker reported a 45% year-over-year decline in profits for the second quarter, missing analysts' expectations. Although quarterly revenue ticked higher from a year ago and exceeded forecasts, lower average selling prices and delivery numbers dragged on Tesla's profitability. The company said it would focus on lowering production costs, developing lower-cost vehicles, and progressing on artificial intelligence projects including its humanoid robots and robotaxi. Stocks that had been surging in 2024 amid lofty AI expectations posted significant losses during Wednesday's rout. Enthusiasm about meeting power demand from AI data centers helped propel shares of power generator Vistra (VST) to an all-time high in May, but the stock has been trending downward since then, and it slipped 9.4%. Shares of server and data storage provider Super Micro Computer (SMCI) dropped 9.2%. Other heretofore AI darlings, including semiconductor giants, also fared poorly. Shares of Roper Technologies (ROP), which provides software and tech-enabled products to a variety of markets, sank 7.4% after the company missed second-quarter revenue estimates and provided a lower-than-expected profit forecast for the current quarter. The soft outlook reflects restrained spending by Roper's clients, with businesses limiting spending and putting off contract renewals amid economic uncertainties and elevated interest rates. Enphase Energy (ENPH) shares notched Wednesday's best performance of any S&P 500 stock, soaring 13% after the manufacturer of solar and EV charging equipment released its quarterly report. Although second-quarter sales and profits fell short of estimates, Enphase guided above expectations for the third quarter. The company touted progress in normalizing its inventory. AT&T (T) also posted slightly lower-than-expected revenue and earnings for the second quarter, but the telecommunications giant exceeded forecasts for postpaid customer additions during the period, and its shares jumped 5.2%. AT&T's free cash flow (FCF) also came in ahead of estimates, and management predicted that full-year FCF will surpass last year's figure. Shares of NextEra Energy (NEE) advanced 4.6% after the renewable energy provider beat quarterly profit estimates and provided an upbeat outlook. The company expressed confidence in its opportunities to replace less efficient forms of power generation and to fulfill the increasing demand for energy arising from various industries.

Midday movers: Tesla, Alphabet, Visa fall; AT&T, Texas Instruments rise By Investing.com

Investing.com -- U.S. stock futures fell Wednesday, with disappointing results from a couple of tech giants hitting sentiment in the early days of the new earnings season. Here are some of the biggest U.S. stock movers today: Tesla (NASDAQ:TSLA) stock slumped 12% after the electric vehicle manufacturer after its second-quarter earnings missed estimates amid falling vehicle sales, and profit margins fell to a five-year low. Alphabet (NASDAQ:GOOGL) stock fell 3.7% after the tech giant's expenses rose substantially year-on-year amid continued expenditure on AI development - a trend that is expected to eat into profit margins in the coming quarters. Trump Media & Technology (DJT) stock fell 5% after a new poll saw likely Democratic presidential candidate Kamala Harris leading Republican nominee Donald Trump in the race for the White House. Visa (NYSE:V) stock fell 4% after the credit card giant's third-quarter revenue growth fell short of expectations as steep borrowing costs limited consumer spending. AT&T (NYSE:T) stock rose 4% after the telecoms giant exceeded market expectations for wireless subscriber additions in the second quarter, as its higher-tier unlimited plans attracted customers. Enphase Energy (NASDAQ:ENPH) stock rose 12% after the solar inverter maker beat expectations for second-quarter operating profit, driven by a recovery in demand in the United States. Boston Scientific (NYSE:BSX) stock fell 3% despite the medical devices manufacturer beating second-quarter profit expectations on a hefty rise in sales of its products to treat cardiovascular problems. Deutsche Bank (ETR:DBKGn) (DB) stock fell 8% after the German lender posted its first loss in four years in the second quarter after setting aside well over $1 billion as a provision for an investor lawsuit, scuppering plans for a stock buyback. Lamb Weston (LW) plunged 27% after it issued guidance for the year that was well below consensus estimates. Analysts called its results 'disastous'. Roper Technologies (NASDAQ:ROP) fell 7% after it gave a lackluster forecast for third quarter.