Stocks ended lower Wednesday as disappointing earnings reports from Alphabet and Tesla soured broader market sentiment.
The Dow Jones Industrial Average tumbled 504 points, or 1.25%, to finish the session at 39,853.87, while the S&P 500 lost 2.31% to 5,427.13, and the tech-heavy Nasdaq Composite sank 3.64% to 17,342.41, marking its worst day since October 2022.
Google parent Alphabet fell 5% to $174.37, the biggest one-day drop since the 7.5% loss on Jan. 31. Tesla ended down 12.3% to $215.99, the stock's worst day since 2020.
Louis Navellier, chairman and founder of Navellier & Associates, said that Tesla “did have a beat on the top line, but a serious miss on the bottom, bringing margin concerns.”
“They appear to have excess capacity, and while the large battery business is growing briskly, and prospects seem quite interesting for its Optimus robot, the continued delays on the autonomous driving/ RoboTaxi rollout were disappointing,” he said.
Updated at 1:31 PM EDT
Thursday earnings preview - by Liam Elias
Wall Street will be back on earnings watch tomorrow with a handful of bluechip updates prior to the opening bell.
AbbVie (ABBV) kicks things off, with analysts looking for a bottom line of $2.57 per share with revenues rising 1.2% from last year to just over $14 billion. Earlier this month, the biotech lowered its full-year profit forecast, and clipped its second quarter estimate as well, citing rising druge milestone and development costs.
Southwest Airlines (LUV) will also post June quarter earnings prior to the open as the carrier hopes to regain confidence following an FAA probe into recent safety incidents.
The group is expected earn 51 cents per share, a 44% slide from last year, on revenues of $7.32 billion, Lower ticket prices and higher costs are also likely to narrow profit margins.
Stellantis, the maker of the Jeep and Dodge brands, is expected to deliver earnings of $2.52 per share on revenue of $49.4 billion.
Stellantis follows yesterday's 'beat-and-raise' update from General Motors, which is seeing renewed demand for its gas-powered trucks.
But the Netherlands-based group has also weathered a host of recent recalls, including 94 Jeep Wranglers and 19,500 mini vans over the past two months that have rattled investor confidence.
Updated at 10:59 AM EDT
Tesla tumble
Tesla shares are getting crushed in early trading, and were last marked 11.3% lower on the session at $218.38 each, following the group's disappointing second quarter earnings and a vague set of forecasts from CEO Elon Musk on the analysts' conference call.
"This is the fourth successive quarter of earnings misses, a first for Musk’s visionary EV maker," said David Morrison, Senior Market Analyst at Trade Nation
"Perhaps even more disturbingly, and a measure of just how much Tesla is feeling the pinch from Chinese competition, gross margins declined to 14.6% for the quarter," he added. "That represents a halving from the first quarter of 2022."
Related: Analysts race to reset Tesla stock price targets after earnings
Updated at 9:48 AM EDT
Soft open
The S&P 500 was marked 59 points lower, or 1.07%, while the Nasdaq slumped 334 points, or 1.34%. The Dow slipped 143 points lower, while the small-cap Russel 2000 gained 10 points, or 0.46%.
Benchmark 2-year notes eased to 4.394%, with 10-year notes trading at 4.227% after S&P Global's composite PMI index fell improved to 55 points in July, up modestly from the 54.8 tally for the previous month.
.. on pace for eighth straight negative session which would be its longest downside streak since February 2020
— Carl Quintanilla (@carlquintanilla) July 24, 2024
@CNBC pic.twitter.com/1N31YxEDMq
AT&T advantage
AT&T shares jumped higher in premarket trading after the wireless carrier posted stronger-than-expected second quarter earnings while adding more than 400,000 subscribers to its U.S. network.
Overall revenues were modestly light of forecast at $29.8 billion, but free cash flow rose just over 9% to $4.6 billion.
AT&T shares were last marked 2.9% higher in premarket trading to indicate an opening bell price of $18.73 each.
AT&T higher after posting Q2 earnings results:
— TrendSpider (@TrendSpider) July 24, 2024
~EPS: $0.57 vs $0.57 est
~SALES: $29.80B vs $29.92B est
~Sees FY24 Adj. EPS $2.15-$2.25
~Sees FY24 Wireless Service Revenue Growth of ~3%https://t.co/U3herC1K3v $T 🟢 +2.91% in pre-market pic.twitter.com/mcQtUH5dQj
Check back for updates throughout the trading day
Stocks ended modestly lower on Tuesday, paced by a broader pullback in the S&P 500 and a reversal of the so-called 'Trump trade' that has favored domestically-focused stocks over those with with major ties to overseas markets.
Last night's brace of Magnificent 7 tech earnings, however, looks set to accelerate selling in megacap tech stocks after a big earnings miss from Tesla (TSLA) and a mixed set of second quarter figures from Google parent Alphabet (GOOGL) .
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Tesla, which saw earnings nearly halve from last year thanks to an ongoing EV price war, posted its weakest profit margins in five years, sending shares 7.7% lower in premarket trading.
Google, meanwhile, topped Street earnings forecasts but noted that capital spending levels would remain elevated into the end of the year while global ad sales looked set for a pullback over the coming months.
Shares in the group were marked 3.4% lower in premarket trading to indicate an opening bell price of $177.39 each.
International Business Machines (IBM) and AT&T (T) will keep Wall Street's busy earnings week on track, with second quarter updates prior to the opening bell, with Ford Motor Co. (F) reporting after the close of trading.
Investors will also navigate through new home sales data for the month of June and S&P Global's closely-tracked economic activity survey for the month of July just after the start of trading.
Donald Trump, who only last week held a commanding lead in November election polls, will travel to Charlotte, North Carolina today in what is expected to be his first of many attacks on Vice President Kamala Harris, who has overtaken the former President in certain voter surveys and set a new single-day fundraising record of $81 million earlier this week.
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500 suggest a 38 point opening bell decline while those linked to the Dow Jones Industrial Average are priced for a 185 point pullback.
The tech-focused Nasdaq, meanwhile, is priced for a larger 200 point decline thanks in part to post-earnings reaction from Google and Tesla as well as a premarket pullback for Nvidia (NVDA) .
More Wall Street Analysts:
- Analyst revisits Nvidia stock price target after Blackwell checks
- Analysts prescribe new Walgreens stock price targets after earnings
- Analyst revises Facebook parent stock price target in AI ar
In overseas markets, Europe's Stoxx 600 was marked 0.58% lower in Frankfurt, with Britain's FTSE 100 falling 0.14% lower in London.
Overnight in Asia, Japan's Nikkei 225 fell 1.11% in a follow-on slump from Wall Street, paced by declines in the tech sector, while the regional MSCI ex-Japan benchmark slipped 0.35% into the close of trading.
Related: Veteran fund manager sees world of pain coming for stocks
