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Wall Street closed mixed on Thursday following mixed earnings results of second-quarter 2023. Moreover, tight labor market data also bolstered market participants’ concern that the Fed may continue to pursue interest rate hike regime. The Dow ended in positive territory, while both the S&P 500 and the Nasdaq Composite finished in negative zone.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.5% or 163.97 points to close at 35,225.18, marking its highest closing since April 2022. Notably, 22 components of the 30-stock index ended in positive territory, while eight in negative zone. The blue-chip index posted ninth consecutive winning days for the first time since 2017.
The tech-heavy Nasdaq Composite finished at 14,063.31, tumbling 2% or 294.71 points due to weak performance of large-cap technology stocks. The S&P 500 fell 0.7% to end at 4,534.87. Seven out of 11 broad sectors of the benchmark ended in positive zone while tfour finished in negative territory.
The Energy Select Sector SPDR (XLE), the Health Care Select Sector SPDR (XLV) and the Utilities Select Sector SPDR (XLU) advanced 1.1%, 1.7% and 1.8%, respectively. On the other hand, the Technology Select Sector SPDR (XLK), the Communication Services Select Sector SPDR (XLC) and the Consumer Discretionary Select Sector SPDR (XLY) plummeted 2%, 2% and 3.4%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was up 1.7% to 13.99. A total of 11.16 billion shares were traded on Thursday, higher than the last 20-session average of 10.6 billion. Decliners outnumbered decliners on the NYSE by a 1.53-to-1 ratio. On Nasdaq, a 1.88-to-1 ratio favored declining issues.
Mixed Q2 Earnings Results
Johnson & Johnson’s (JNJ - Free Report) second-quarter 2023 earnings came in at $2.80 per share, which beat the Zacks Consensus Estimate of $2.61. Sales of this drug and consumer products giant came in at $25.53 billion, beating the Zacks Consensus Estimate of $24.68 billion.
Netflix Inc. (NFLX - Free Report) reported second-quarter 2023 earnings of $3.29 per share, which beat the Zacks Consensus Estimate by 16.25% and increased 2.8% year over year. Revenues of $8.19 billion increased 2.7% year over year but lagged the consensus mark by 0.93%. On a foreign-exchange neutral basis, revenues grew 6% year over year.
Tesla Inc. (TSLA - Free Report) reported second-quarter 2023 earnings of $0.91 per share, which rose from the year-ago figure of $0.76 and outpaced the Zacks Consensus Estimate of $0.83. Total revenues came in at $24,927 million, witnessing year-over-year growth of 47%. The top line exceeded the consensus mark of $24,884 million.
However, Tesla’s operating margins dipped to single digits in the quarter under discussion. The metric came in at 9.6% (the lowest level in the past five quarters). The underperformance can be attributed to unexpectedly higher costs involved in scaling up the production of new battery cells, the Cybertruck, and other large projects. Management said vehicle production would slow during the third quarter due to shutdowns for factory improvements.
The Department of Labor reported that weekly jobless claims decreased by 9,000 to 228,000 for the week ended Jul 15, missing the consensus estimate of 240,000. Continuing claims — people who already received government unemployment benefit and run a week behind the headline number — came in at 1.754 million for the week ended Jul 8. This compares to a revised 1.721 million in the prior week.
The National Association of REALTORS reported that the existing home sales came in at 4.16 million units in June, missing the consensus estimate of 4.23 million units. The metric for May was 4.3 million units.
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Stock Market News for Jul 21, 2023
Wall Street closed mixed on Thursday following mixed earnings results of second-quarter 2023. Moreover, tight labor market data also bolstered market participants’ concern that the Fed may continue to pursue interest rate hike regime. The Dow ended in positive territory, while both the S&P 500 and the Nasdaq Composite finished in negative zone.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.5% or 163.97 points to close at 35,225.18, marking its highest closing since April 2022. Notably, 22 components of the 30-stock index ended in positive territory, while eight in negative zone. The blue-chip index posted ninth consecutive winning days for the first time since 2017.
The tech-heavy Nasdaq Composite finished at 14,063.31, tumbling 2% or 294.71 points due to weak performance of large-cap technology stocks. The S&P 500 fell 0.7% to end at 4,534.87. Seven out of 11 broad sectors of the benchmark ended in positive zone while tfour finished in negative territory.
The Energy Select Sector SPDR (XLE), the Health Care Select Sector SPDR (XLV) and the Utilities Select Sector SPDR (XLU) advanced 1.1%, 1.7% and 1.8%, respectively. On the other hand, the Technology Select Sector SPDR (XLK), the Communication Services Select Sector SPDR (XLC) and the Consumer Discretionary Select Sector SPDR (XLY) plummeted 2%, 2% and 3.4%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was up 1.7% to 13.99. A total of 11.16 billion shares were traded on Thursday, higher than the last 20-session average of 10.6 billion. Decliners outnumbered decliners on the NYSE by a 1.53-to-1 ratio. On Nasdaq, a 1.88-to-1 ratio favored declining issues.
Mixed Q2 Earnings Results
Johnson & Johnson’s (JNJ - Free Report) second-quarter 2023 earnings came in at $2.80 per share, which beat the Zacks Consensus Estimate of $2.61. Sales of this drug and consumer products giant came in at $25.53 billion, beating the Zacks Consensus Estimate of $24.68 billion.
Netflix Inc. (NFLX - Free Report) reported second-quarter 2023 earnings of $3.29 per share, which beat the Zacks Consensus Estimate by 16.25% and increased 2.8% year over year. Revenues of $8.19 billion increased 2.7% year over year but lagged the consensus mark by 0.93%. On a foreign-exchange neutral basis, revenues grew 6% year over year.
Tesla Inc. (TSLA - Free Report) reported second-quarter 2023 earnings of $0.91 per share, which rose from the year-ago figure of $0.76 and outpaced the Zacks Consensus Estimate of $0.83. Total revenues came in at $24,927 million, witnessing year-over-year growth of 47%. The top line exceeded the consensus mark of $24,884 million.
However, Tesla’s operating margins dipped to single digits in the quarter under discussion. The metric came in at 9.6% (the lowest level in the past five quarters). The underperformance can be attributed to unexpectedly higher costs involved in scaling up the production of new battery cells, the Cybertruck, and other large projects. Management said vehicle production would slow during the third quarter due to shutdowns for factory improvements.
Consequently, the stock price of Johnson & Johnson jumped 6.1%, while Netflix and Tesla plunged 8.4% and 9.7%, respectively. All the three stocks currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
The Department of Labor reported that weekly jobless claims decreased by 9,000 to 228,000 for the week ended Jul 15, missing the consensus estimate of 240,000. Continuing claims — people who already received government unemployment benefit and run a week behind the headline number — came in at 1.754 million for the week ended Jul 8. This compares to a revised 1.721 million in the prior week.
The National Association of REALTORS reported that the existing home sales came in at 4.16 million units in June, missing the consensus estimate of 4.23 million units. The metric for May was 4.3 million units.