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Markets Slide into the Close; AMAT, ROST Beat & Raise

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Markets started today’s session with a stiff upper lip, perhaps buoyed by a strong earnings report from Walmart (WMT - Free Report) ahead of the opening bell, with good weekly jobs numbers on Initial Jobless Claims and a surprisingly positive Philly Fed report. But the bulls could not hold on, and after a slight surge after lunch, we saw indices sink near session lows by the close. The Dow shed -274 points, -0.79%, exactly the -0.79% posted by the S&P 500. The Nasdaq and Russell 2000 were hit even deeper, -1.18% and -1.14%, respectively.

So far, this is shaping up to be the Nasdaq’s worst month all year, -7.22% already, with 10 days remaining for the month. The tech-heavy index and the S&P both look ready to snap five-month winning streaks; we can say they were due for a correction, but they’re really getting hammered this August. The Russell, too: -6.38%. The Dow had been holding its head above water this month, but it’s down -1.37% in the past month.

Call it “A Big Shakeout”: indices have ben off to the races since mid-spring, with the Nasdaq capping up +38% at couple small peaks last month. Of course we’re looking for a bounceback from a deeply challenging 2022, but gains of nearly 40% mid-year were bound to get smacked down to reality a bit. The good news here is that with Q2 guidance pointing in the right direction overall, what we’re looking at in our current bearish period looks less like a market melting down and more like a market slimming down to make advances once levels of resistance are hit.

Applied Materials (AMAT - Free Report) posted a strong beat-and-raise for its fiscal Q3 report out after today’s close, with earnings of $1.90 per share sailing past the $1.73 expected in the Zacks consensus, on revenues of $6.43 billion which easily cleared the $6.16 billion estimate. Further, the Silicon Valley semiconductor fabrication equipment supplier guided next-quarter earnings to a range of $1.82-2.18 per share, nicely above the $1.58 analysts had been expecting. Shares had jolted up more than +2.6% on the news in late trading, but have more recently abated to about half that level of gain in the after-market.

Discount department store Ross Stores (ROST - Free Report) also posted superior numbers compared to expectations in its Q2 report after today’s closing bell. Earnings of $1.32 per share bettered the $1.17 anticipated (and a strong improvement from the $1.11 per share reported in the year-ago quarter) on quarterly sales of $4.93 billion, nicely out in front of the $4.74 billion analysts were looking for. Guidance for both next quarter and full-year earnings were raised, as well. This makes five straight earnings beats, and shares +5.8% in today’s after market swing the stock into positive territory year to date.

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