The Dow Jones Industrial Average moved lower Thursday after a few days of stronger action from the major indexes. A big sell-off in Facebook parent Meta Platforms after it reported earnings hindered the indexes as well. Meanwhile, the 10-year Treasury yield jumped 7 points to around 1.84%.
Stock Market Today
At around 1:30 p.m. ET, the Dow Jones industrials were down 0.8% while the Nasdaq composite fell 2.4% to lead the downside. The S&P 500 declined 1.5%.
The communications services sector, where Mata Platforms has a big weighting, led the downside on Thursday, off around 6%. Consumer discretionary and technology sectors also underperformed. Defensive plays like utilities and consumer staples were among the sectors leading the upside on Thursday. Utilities were the only sector trading higher.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 35338.21 | -291.12 | -0.82 |
| S&P 500 | (0S&P5) | 4518.71 | -70.67 | -1.54 |
| Nasdaq | (0NDQC ) | 14073.87 | -343.68 | -2.38 |
| Russell 2000 | 199.13 | -2.21 | -1.10 | |
| IBD 50 | 38.28 | -0.54 | -1.39 | |
Last Update: 1:34 PM ET 2/3/2022 |
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The Russell 2000 lost 1.1% as small caps also underperformed. Volume was running lower on the Nasdaq and on the NYSE vs. the same time Wednesday. The Innovator IBD 50 ETF traded down 1.4%.
The major indexes notched a nice four-day win streak, which seems to be ending with Thursday's sharp decline. The major indexes could still rally back, but that appears unlikely at this point. IBD's market outlook earlier this week moved up to "confirmed uptrend," and so far it remains intact. But yesterday's The Big Picture noted that this kind of market volatility makes for difficult trading, even if the latest market signals have been positive.
Meta Platforms Earnings Hinder Indexes
Meta Platforms cratered over 26% after fourth-quarter results came in well below estimates, and the company's outlook was disappointing. The parent of Facebook is now trading at the lowest level since July 2020. Meta is the sixth largest company in the Nasdaq and S&P 500, which means its price performance has a big effect on the indexes performance.
Meta's loss of $219.7 billion in market cap so far today would make it the largest single-day market value decline on record among U.S. companies, according to Dow Jones Market Data.
Many of Facebook's major clients are finding that online ads are less effective now because of privacy changes. Meta raised that concern as well. "We believe competitive services are negatively impacting growth, particularly with younger audiences," CFO Dave Wehner said in Wednesday's Q4 earnings call.
Elsewhere, Qualcomm also reported earnings. The company easily beat December-quarter expectations and raised guidance as well. However, shares fell 1.8%, wiping out some of the prior day's gain. The stock is still holding support at the 50-day line, a bullish sign.
Earnings On Deck: Amazon, Ford
Later today, both automaker Ford and IBD Long-Term Leader Fortinet are set to report after the closing bell.
Analysts expect Ford to earn 45 cents per share in adjusted earnings and $35.5 billion in revenue, according to Refinitiv estimates. Shares are holding up right below the 50-day and 21-day lines. The stock cut below these areas in recent weeks. Shares fell roughly 2% on Thursday.
As for Fortinet, analysts expect fourth-quarter revenue to increase to about $960 million. Analysts also expect Fortinet to post fourth-quarter profit of $1.03 a share, or $1.15 a share as adjusted, according to FactSet. Fortinet forecast $1.10 to $1.15 a share in adjusted profit. Fortinet shares fell 1.5% on Thursday.
Also, Amazon.com earnings are due after the close. Investors will be watching how the e-commerce company is handling worker shortages and strained supply chains. Analysts expect adjusted earnings of $3.72 a share, down 7% from the year-ago period, on sales of $137.7 billion, up 10%.
Amazon stock gapped down and tumbled nearly 7% Thursday. Shares have also declined significantly the past few months. Shares are below their 50-day and 200-day lines. The stock is also finding resistance at the 21-day line, which sits below both longer-term moving averages.
Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.
