Red week
U.S. stocks closed firmly lower Friday, extending Wall Street's recent selloff to a third consecutive session, as global markets, as well as businesses spanning travel, banking, healthcare and finance, grappled with the impact of a massive IT outage.
The S&P 500, which ended its worst week since March, fell 39.5 points, or 0.71%, while the Nasdaq ended 144 points lower, or 0.81%, to extend its five-day decline past 4%.
The Dow, meanwhile, fell another 377 points but managed to hold onto a weekly gain of 0.37% thanks in part to big shifts away from tech stocks to industrial and domestic focused companies prior to the mid-week slump.
Dow Jones $DJI and Russell 2000 $IWM closed the week in green, while the S&P 500 $SPY and Nasdaq 100 $QQQ closed the week in red.
— Wall St Engine (@wallstengine) July 19, 2024
Here's the final weekly heatmap of the S&P 500 👇 pic.twitter.com/oz7oi7tXfs
Updated at 1:19 PM EDT
Back in the skies
United Airlines shares turned higher in afternoon trading, rising 1% to $46.87 each, after the carrier said it's restoring its regular schedule following the grounding of hundreds of flights as a result of the CrowdStrike IT outage.
Rivals Delta Airlines and American Airlines, meanwhile, remained in negative territory for the session.
A third-party outage is impacting computer systems, including at United and many other organizations worldwide.
— United Airlines (@united) July 19, 2024
As we work to fully restore these systems, some flights are resuming. Many customers traveling today may experience delays.
We have issued a waiver to make it easier…
Updated at 11:41 AM EDT
Tough week
The S&P 500 is testing its lowest levels in nearly three weeks as the global equity market selloff continues, paced in part by the impact of last night's global IT disruptions.
The benchmark, which is down 0.55% on the session, has fallen more than 1.8% this week, while the tech-focused Nasdaq is down 3.5% thanks to big declines for chip stocks and the fallout from CrowdStrike and Microsoft.
BIDEN BRIEFED ON OUTAGE
— *Walter Bloomberg (@DeItaone) July 19, 2024
A White House official said President Biden "has been briefed on the CrowdStrike outage and his team is in touch with CrowdStrike and impacted entities. His team is engaged across the interagency to get sector by sector updates throughout the day and is…
Updated at 9:38 AM EDT
Early losses
The Dow fell around 240 points in the opening minutes of trading, lead by a 1.05% decline for Microsoft, while the Nasdaq and the S&P 500 were little-changed from last night's close, but edging lower.
"Friday's global tech outage is an example of an unforeseen event that market participants always fear, but don't frequently think about," said Glen Smith, chief investment officer at GDS Wealth Management in Flower Mound, Texas.
"While there are sizable declines in the stocks of the individual companies that are closest to this tech outage, we expect the broader markets to look past Friday's outage," he added.
S&P 500 Opening Bell Heatmap (Jul. 19, 2024)$SPY -0.12%🟥$QQQ -0.16% 🟥$DJI -0.53%🟥$IWM -0.39%🟥 pic.twitter.com/gWLtanHoJl
— Wall St Engine (@wallstengine) July 19, 2024
Updated at 8:43 AM EDT
Amex, but not green
American Express (AXP) shares were caught in the early market downdraft, falling 2.1% to $244.00 each, even as the credit card group posted stronger-than-expected second quarter earnings and boosted its full-year profit forecast.
Second quarter revenues were just shy of Street forecasts, however, at $16.33 billion, and the group said its marketing budget will likely rise 15% from last year's levels.
Stock Market Today
Microsoft's (MSFT) Azure cloud services suffered an unknown issue that the tech giant insisted was not a cybersecurity attack, adding that it's been identified, isolated and now under repair.
“We’re aware of an issue affecting Windows devices due to an update from a third-party software platform. We anticipate a resolution is forthcoming,” Microsoft said in a statement.
Separately, cybersecurity group CrowdStrike (CRWD) said Falcon Sensor, its threat-monitoring software, was causing Windows operating systems to crash in IT systems and networks all over the world.
CrowdStrike is actively working with customers impacted by a defect found in a single content update for Windows hosts. Mac and Linux hosts are not impacted. This is not a security incident or cyberattack. The issue has been identified, isolated and a fix has been deployed. We…
— George Kurtz (@George_Kurtz) July 19, 2024
Several U.S. air carries grounded hundreds of flights as a result of the multiple systems failures, including American Airlines (AAL) , Delta Air Lines and (DAL) United Airlines (UAL) , while airports from Tokyo to Toronto suffered long delays, cancellations and ticketing issues.
Related: CrowdStrike stock tumbles after update triggers global IT chaos
In the United Kingdom, Sky News, which was bought by Comcast (CMCSA) in 2018, went off the air as a result of the outage, with reports of impacts at hospitals, banks and government agencies. Trading at the London Stock Exchange was also affected.
Shutterstock
The outage and its impact are likely to have only a minimal impact of U.S. stock markets, however, with futures contracts tied to all three major benchmarks suggesting little change from last night's broad market selloff.
The S&P 500 is set to open around 2 points higher, with a modest 40 point decline expected for the Nasdaq and a 65 point pullback for the Dow Jones Industrial Average.
Microsoft shares were marked 2.15% lower at $430.89 in heavy premarket volume, while CrowdStrike shares plunged 16.1% to $287.70 each.
Netflix (NFLX) shares were also active, falling 1.1% to $636.12 each, after the streaming media group posted stronger-than-expected second quarter earnings and robust subscriber growth, but cautioned that it new ad-supported business would grow at a slower pace than Wall Street forecasts.
In the bond market, Treasury yields were modestly higher heading into the final day of the trading week, with 10-year notes changing hands at 4.211% and 2-year notes pegged at 4.479%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.18% higher at 104.365.
More Wall Street Analysts:
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In overseas markets, Europe's Stoxx 600 was marked 0.54% lower in Frankfurt, while Britain's FTSE 100 was marked 0.4% lower in London.
Overnight in Asia, the region-wide MSCI ex-Japan benchmark fell 1.76% into the close of trading, while Japan's Nikkei 225 ended 0.16% lower in Tokyo.
Related: Veteran fund manager sees world of pain coming for stocks
