Stocks slide as Tesla, Alphabet earnings drag on megacaps
For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.
Visa falls after missing revenue growth forecasts
AT&T rises after beating subscriber-addition estimates
Enphase Energy up after results
Rivian falls; faces trial in Tesla trade secrets theft case
Indexes down: Dow 0.51%, S&P 1.16%, Nasdaq 1.82%
Updated at 9:51 a.m. ET/ 1351 GMT
By Ankika Biswas and Lisa Pauline Mattackal
July 24 (Reuters) - Wall Street fell onWednesday, with the tech-heavy Nasdaq leading declines after lackluster quarterly resultsfrom Tesla and Alphabet raised questions about the sustainability of the Big Tech and AI-led 2024 equity rally.
Tesla TSLA.O slumped 11.2% and was set to lose over $83 billion in market value from Tuesday's close, if losses hold, after the EV maker reportedits lowest profit margin in more than fiveyears and missed second-quarter earnings estimates.
Google parent Alphabet GOOGL.O, too, shed 4.1% despite posting a second-quarter earnings beat, as investors focused on a slowdown in advertising growth and the company flagged highcapital expenses for the year.
Alphabet's losses underscored the high earnings bar for the so-called Magnificent Seven, a set of megacap tech stocks that have notched double- and triple-digit percentage gains so far in 2024, riding on the optimism around AI adoption and expectations of an early start to the Federal Reserve's interest-rate cuts.
"I can't help thinking (that) if the tech sector does sneeze, the whole market could catch it," said David Morrison, senior market analyst at TradeNation.
Other megacaps also fell, with Microsoft MSFT.O, Amazon.com AMZN.O, Meta Platforms META.O and Nvidia NVDA.O down between 0.8% and 2.9%.
Chary of the high valuation of these companies, market participants started shifting tounderperforming sectors in mid-July. Morrison sounded a note of caution, saying broad megacap declines could drag the entire market down.
"If money comes out of the tech sector, it'll come out quite dramatically. I don't think the first reaction of those investors is going to be to immediately redeploy those funds into mid- and small-cap stocks," Morrison said.
The small-cap Russell 2000 .RUT fell0.3% after a 1% gain in the previous session, while Tesla and Alphabet's results dragged the Communication Services .SPLRCL and Consumer Discretionary .SPLRCD sector indexes down more than 2% each.
In economic data, S&P Global's flash U.S. Composite PMI Output Index showedbusiness activity climbed to a 27-month high in July.
Friday's release of the personalconsumption expenditures numbers, the U.S. Federal Reserve's preferred inflation measure, will be the week's most closely watched economic data.
Traders largely expect the Fed to cut rates by 25basis points by September and anticipate two rate cuts this year, according to LSEG data.
At 9:51 a.m. ET, the Dow Jones Industrial Average .DJI was down 203.99 points, or 0.51%, at 40,154.10, the S&P 500 .SPX was down 64.25 points, or 1.16%, at 5,491.49, and the Nasdaq Composite .IXIC was down 328.36 points, or 1.82%, at 17,669.00.
In otherearnings, AT&T T.N gained3.6% after beating forecasts forwireless subscriber additions.
VisaV.N was the biggest Dow decliner, dropping3.9% after its third-quarter revenue growth fell short of expectations.
Solar inverter maker Enphase Energy ENPH.O jumped 7.4% after beating estimates for second-quarter operating profit, while General Dynamics<GD.N> fell 5.1% afterdelivering fewer business jets than expected in the second quarter.
Rivian Automotive RIVN.O lost6.3%. TheEV maker will go on trial over allegations it encouraged its employees who defected from Tesla to steal trade secrets.
Declining issues outnumbered advancers for a 1.31-to-1 ratio on the NYSE, andfor a 1.48-to-1 ratio on the Nasdaq.
The S&P index recorded nine new 52-week highs and three new lows, while the Nasdaq recorded 58 new highs and 33 new lows.
Tesla's automotive gross margins https://tmsnrt.rs/4c2swJk
Reporting by Ankika Biswas and Lisa Mattackal in Bengaluru; Editing by Varun H K and Pooja Desai
Asset collegati
Ultime news
Disclaimer: le entità di XM Group forniscono servizi di sola esecuzione e accesso al nostro servizio di trading online, che permette all'individuo di visualizzare e/o utilizzare i contenuti disponibili sul sito o attraverso di esso; non ha il proposito di modificare o espandere le proprie funzioni, né le modifica o espande. L'accesso e l'utilizzo sono sempre soggetti a: (i) Termini e condizioni; (ii) Avvertenza sui rischi e (iii) Disclaimer completo. Tali contenuti sono perciò forniti a scopo puramente informativo. Nello specifico, ti preghiamo di considerare che i contenuti del nostro servizio di trading online non rappresentano un sollecito né un'offerta ad operare sui mercati finanziari. Il trading su qualsiasi mercato finanziario comporta un notevole livello di rischio per il tuo capitale.
Tutto il materiale pubblicato sul nostro servizio di trading online è unicamente a scopo educativo e informativo, e non contiene (e non dovrebbe essere considerato come contenente) consigli e raccomandazioni di carattere finanziario, di trading o fiscale, né informazioni riguardanti i nostri prezzi di trading, offerte o solleciti riguardanti transazioni che possano coinvolgere strumenti finanziari, oppure promozioni finanziarie da te non richieste.
Tutti i contenuti di terze parti, oltre ai contenuti offerti da XM, siano essi opinioni, news, ricerca, analisi, prezzi, altre informazioni o link a siti di terzi presenti su questo sito, sono forniti "così com'è", e vanno considerati come commenti generali sui mercati; per questo motivo, non possono essere visti come consigli di investimento. Dato che tutti i contenuti sono intesi come ricerche di investimento, devi considerare e accettare che non sono stati preparati né creati seguendo i requisiti normativi pensati per promuovere l'indipendenza delle ricerche di investimento; per questo motivo, questi contenuti devono essere considerati come comunicazioni di marketing in base alle leggi e normative vigenti. Assicurati di avere letto e compreso pienamente la nostra Notifica sulla ricerca di investimento non indipendente e la nostra Informativa sul rischio riguardante le informazioni sopra citate; tali documenti sono consultabili qui.
