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U.S. stock markets tumbled on Wednesday following weaker-than-expected earnings results of two “magnificent 7” stocks. Market participants remained concerned regarding future growth of AI-centric stocks. Moreover, a few soft economic data also dented investors’ confidence on the U.S. economy. All three major stock indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) slid 1.3% or 504.22 points to close at 39,853.87. The blue-chip index posted first closing below the threshold 40,000 level since Jul 11. Notably, 21 components of the 30-stock index ended in negative territory while 9 in positive zone.
The tech-heavy Nasdaq Composite finished at 17,342.41, plunging 3.6% or 654.94 points due to weak performance by technology behemoths. The tech-laden index also posted its worst single-day performance sine 2022.
The S&P 500 plummeted 2.3% or 128.61 points to finish at 5,427.13, marking its worst single-day performance since 2022. Wall Street’s benchmark index posted first closing below the threshold 5,500 level since Jul 1.
Ten out of the 11 broad sectors of the broad-market index ended in positive territory, while one in negative zone. The Technology Select Sector SPDR (XLK), the Consumer Discretionary Select Sector SPDR (XLY), the Industrials Select Sector SPDR (XLI) and the Communication Services Select Sector SPDR (XLC) tanked 4.1%, 4.1%, 2.2% and 2.6%, respectively. On the other hand, the Utilities Select Sector SPDR (XLU) increased 1.1%.
The fear-gauge CBOE Volatility Index (VIX) jumped 25.1% to 18.42, reflecting its highest level since Apr 19. A total of 12.94 billion shares were traded on Wednesday, lower than the last 20-session average of 11.48 billion.
Weak Earnings Results
Alphabet Inc.’s (GOOGL - Free Report) second-quarter 2024 earnings of $1.89 per share beat the Zacks Consensus Estimate by 2.2%. The figure grew 31.3% year over year. Net revenues, excluding total traffic acquisition costs, were $71.35 billion, which surpassed the consensus mark by 1.1%. The figure rose 15% from the year-ago quarter.
However, YouTube advertising revenue came in at $8.66 billion, missing the consensus mark of $8.93 billion. Also, the company indicated a huge $12 billion capital expenditure for the rest of 2024. As a result, stock price tumbled 5%, to its worst finish since May 31.
Tesla Inc. (TSLA - Free Report) reported quarterly earnings per share (EPS) of $0.52, missing the Zacks Consensus Estimate of $0.62 and also declined from the year-ago figure of $0.91. Total revenues of $25.5 billion topped the consensus mark of $25.1 billion and rose 2% year over year. The stock price plummeted 12.3%, to its worst finish since September 2020.
The S&P Global Flash U.S. PMI Composite Output Index came in at 55 in July, marking its 27-month high level. The metric for June was 54.8. Flash U.S. Services Business Activity Index came in at 56 in July, marking its 28-month high level. The metric for June was 55.3.
Flash U.S. Manufacturing Output Index for July came in at 49.5, its 6-month low. The metric for June was 52.1. For July, the Flash U.S. Manufacturing PMI came in at 49.5, its 7-month low. The metric for June was 51.6. Any reading blow 50 indicates contraction in economic activities.
The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly reported that new home sales in June came in at 617,000, missing the Zacks Consensus Estimate of 643,000. The reading for May was revised upward to 621,000 from 619,000 reported earlier.
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Stock Market News for Jul 25, 2024
U.S. stock markets tumbled on Wednesday following weaker-than-expected earnings results of two “magnificent 7” stocks. Market participants remained concerned regarding future growth of AI-centric stocks. Moreover, a few soft economic data also dented investors’ confidence on the U.S. economy. All three major stock indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) slid 1.3% or 504.22 points to close at 39,853.87. The blue-chip index posted first closing below the threshold 40,000 level since Jul 11. Notably, 21 components of the 30-stock index ended in negative territory while 9 in positive zone.
The tech-heavy Nasdaq Composite finished at 17,342.41, plunging 3.6% or 654.94 points due to weak performance by technology behemoths. The tech-laden index also posted its worst single-day performance sine 2022.
The S&P 500 plummeted 2.3% or 128.61 points to finish at 5,427.13, marking its worst single-day performance since 2022. Wall Street’s benchmark index posted first closing below the threshold 5,500 level since Jul 1.
Ten out of the 11 broad sectors of the broad-market index ended in positive territory, while one in negative zone. The Technology Select Sector SPDR (XLK), the Consumer Discretionary Select Sector SPDR (XLY), the Industrials Select Sector SPDR (XLI) and the Communication Services Select Sector SPDR (XLC) tanked 4.1%, 4.1%, 2.2% and 2.6%, respectively. On the other hand, the Utilities Select Sector SPDR (XLU) increased 1.1%.
The fear-gauge CBOE Volatility Index (VIX) jumped 25.1% to 18.42, reflecting its highest level since Apr 19. A total of 12.94 billion shares were traded on Wednesday, lower than the last 20-session average of 11.48 billion.
Weak Earnings Results
Alphabet Inc.’s (GOOGL - Free Report) second-quarter 2024 earnings of $1.89 per share beat the Zacks Consensus Estimate by 2.2%. The figure grew 31.3% year over year. Net revenues, excluding total traffic acquisition costs, were $71.35 billion, which surpassed the consensus mark by 1.1%. The figure rose 15% from the year-ago quarter.
However, YouTube advertising revenue came in at $8.66 billion, missing the consensus mark of $8.93 billion. Also, the company indicated a huge $12 billion capital expenditure for the rest of 2024. As a result, stock price tumbled 5%, to its worst finish since May 31.
Tesla Inc. (TSLA - Free Report) reported quarterly earnings per share (EPS) of $0.52, missing the Zacks Consensus Estimate of $0.62 and also declined from the year-ago figure of $0.91. Total revenues of $25.5 billion topped the consensus mark of $25.1 billion and rose 2% year over year. The stock price plummeted 12.3%, to its worst finish since September 2020.
Both 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 S&P Global Flash U.S. PMI Composite Output Index came in at 55 in July, marking its 27-month high level. The metric for June was 54.8. Flash U.S. Services Business Activity Index came in at 56 in July, marking its 28-month high level. The metric for June was 55.3.
Flash U.S. Manufacturing Output Index for July came in at 49.5, its 6-month low. The metric for June was 52.1. For July, the Flash U.S. Manufacturing PMI came in at 49.5, its 7-month low. The metric for June was 51.6. Any reading blow 50 indicates contraction in economic activities.
The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly reported that new home sales in June came in at 617,000, missing the Zacks Consensus Estimate of 643,000. The reading for May was revised upward to 621,000 from 619,000 reported earlier.