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
Aloqador aktivlar
Eng oxirgi yangiliklar
Javobgarlikdan voz kechish: XM Group korxonalari har biri faqat ijro xizmatlarini koʻrsatadi va onlayn savdo platformamizdan foydalanish huquqini beradi, bu odamga veb-saytda yoki veb-sayt orqali mavjud boʻlgan kontentni koʻrish va/yoki undan foydalanishga ruxsat beradi hamda uni oʻzgartirishga moʻljallanmagan va uni oʻzgartirmaydi yoki kengaytirmaydi. Bunday kirish va foydalanish huquqi doimo quyidagilarga boʻysunadi: (i) Shartlar va qoidalar; (ii) Risklar haqida ogohlantirish; va (iii) Javobgarlikni toʻliq rad etish. Shuning uchun bunday kontent umumiy maʼlumot sifatida taqdim etiladi. Xususan, shuni esda tutingki, bizning onlayn savdo platformamiz mazmuni moliyaviy bozorlarda biror bitimni amalga oshirishga oid maslahat yoki taklif emas. Har qanday moliyaviy bozorda savdo qilish sizning kapitalingiz uchun jiddiy risk darajasini oʻz ichiga oladi.
Onlayn savdo platformamizda chop etilgan barcha materiallar faqat taʼlim/axborot maqsadlari uchun moʻljallangan va unda moliyaviy, investitsiya soligʻi yoki savdo maslahatlari va tavsiyalar; yoki bizning savdo narxlarimizning qaydlari; yoki har qanday moliyaviy vositalar bilan bitim tuzish maslahati yoki taklifi; yoki sizga kerak boʻlmagan moliyaviy reklama aksiyalari hisoblanmaydi
Har qanday uchinchi tomon kontenti, shuningdek XM tomonidan tayyorlangan kontent, masalan: fikrlar, yangiliklar, tadqiqotlar, tahlillar, narxlar va boshqa maʼlumotlar yoki bu veb-saytda joylashgan uchinchi tomon saytlariga havolalar umumiy bozor sharhi sifatida "boricha" taqdim etiladi va investitsiya maslahatini tashkil etmaydi. Har qanday kontent investitsiya tadqiqoti sifatida talqin qilinsa, siz bunday kontentni investitsiya tadqiqotlarining mustaqilligini ragʻbatlantirish uchun moʻljallangan qonun talablariga muvofiq moʻljallanmagan va tayyorlanmaganligini eʼtiborga olishingiz va qabul qilishingiz kerak, shuning uchun unga tegishli qonunlar va qoidalarga muvofiq marketing kommunikatsiyasi sifatida qaraladi. Mustaqil boʻlmagan investitsiya tadqiqoti va yuqoridagi maʼlumotlarga oid risk haqida ogohlantirishimizni oʻqib chiqqaningizga va tushunganingizga ishonch hosil qiling, unga bu yerdan kirish mumkin.
