Stock market indexes were back near session lows Thursday afternoon as Treasury yields jumped. The Nasdaq composite was down more than 1% after Tesla and Netflix slid on their earnings reports.
The Nasdaq, which had been up seven of the past eight sessions, was down 1.5%. The S&P 500 lost 0.4%. The Russell 2000 fell 1%.
But the Dow Jones Industrial Average rose 0.7% after three components jumped on earnings. Johnson & Johnson rallied 6% in big volume. J&J beat Q2 estimates and raised its profit guidance.
Travelers gapped up but pared gains to 1.3% in afternoon trading. IBM also rallied after its Q2 earnings report late Wednesday.
Volume fell on the Nasdaq and the NYSE in today's market compared with the same time on Wednesday.
The Innovator IBD 50 ETF lagged with a 2.3% decline due to weakness in its software and chip components.
In economic data, the Index of Leading Economic Indicators fell 0.7% in June, and has dropped for 15 consecutive months. Existing home sales fell to an annual rate 4.16 million in June from 4.3 million in the previous month. The number was down 18.9% year over year, according to Econoday. And jobless claims fell to 228,000 from a revised 237,000 the previous week, and below forecasts for 241,000.
The yield on the 10-year Treasury rebounded 13 basis points to 3.87%.
Stock Market Falls On Tesla, Other Earnings
Tesla gapped down nearly 9% in heavy trading and is falling below the 21-day exponential moving average.
The company topped second-quarter expectations late Wednesday, despite that price cuts and discounts kept gross margins below the 20% floor that Tesla has targeted. CEO Elon Musk said it's "silly" to worry about falling profit margins. He offered little by way of updates on the Cybertruck or other products.
Netflix stock grew its loss to 9% at midday. The video streaming company beat estimates for new subscribers, but forecast lower-than-expected sales.
Chip stocks were broadly lower, with the PHLX Semiconductor Index off 2.2%. Taiwan Semiconductor Manufacturing beat Q2 expectations but cut its sales outlook for the full year. TSMC is now forecasting a 10% decline, up from its earlier view for a mid-single-digit decline. Shares fell more than 4%.
ASML tumbled more than 4% in heavy volume, falling more than 7% below last week's breakout at 747.13. That triggers a sell signal.
American Airlines slid more than 5% even though it topped sales and earnings expectations, adding to a bullish spate of Q2 results for the industry. American Airlines raised its full-year EPS guidance to $3-$3.75 from a previous forecast of $2.50-$3.50. It also expects Q3 EPS of 85 cents to 95 cents. The stock is falling back near a 16.72 handle entry.
But United Airlines improved its gain to 3.8% after it beat revenue and profit expectations. The airline said it flew the highest volume of revenue passengers since before the pandemic.
Stock Market Mulls Homebuilder, Bank Earnings
Homebuilding stocks came off their uptrend, as iShares U.S. Home Construction ETF fell 3.4%.
D.R. Horton reversed sharply lower. The nation's largest publicly traded homebuilder beat profit expectations despite a 16% decline from the year-ago period. Revenue rose 11% to $9.7 billion as limited supply runs against strong demand.
A batch of earnings reports in the financial sector were met mainly with selling.
Discover Financial Services sold off 16% in huge volume, crashing below its 50-day and 200-day moving averages. It is Discover's worst day since March 18, 2020, when it fell 26.8%, according to Dow Jones Market Data.
Discover missed profit estimates late Wednesday and disclosed a number of problems. The company said it erred in classifying some credit-card accounts, resulting in higher costs for merchants. The error goes back to 2007. And Discover said it also faces a consumer compliance issue with the FDIC. The credit card company will pause stock repurchases.
Truist Financial slid 6% in today's stock market after a miss on its Q2 report. Blackstone pared its loss to 0.4%. KeyCorp reversed higher 5% after a weak open.
