The latest data from the Wall Street stock exchange is as follows:
- The Dow Jones Industrial Average closed up 0.2 percent and reached 39,935.07 points.
- At the end of the day, the S&P 500 lost 0.51 percent and amounted to 5,399.22 points.
- The Nasdaq Composite fell 0.93 percent and closed the session at 17,181.72 points.
- The Russell 2000 mid-cap index rose 1.26 percent to 2,222.98 points.
- The VIX volatility index is up 2.33 percent to 18.46 points.
Are big techs retreating?
Wednesday’s session ended with heavy declines after weak results from technology companies Alphabet and Tesla. On Thursday, investors continued to sell off, with tech companies Meta, Microsoft and Alphabet down around 1.7%, 2.5% and 3%, respectively. Nvidia lost 1.7%.
The S&P 500 and Nasdaq Composite indices both posted their worst session of 2022 on Wednesday, with Wells Fargo analysts predicting the S&P 500 could fall further. Still, the index is up 15% for the year. Investors have viewed the recent declines as a sign of an overdue correction, and there’s a shift away from big tech stocks toward small-cap stocks and more cyclical parts of the market.
“There’s a changing of the guard on Wall Street. AI stocks were up earlier, and now they’re losing,” said Adam Sarhan, CEO of 50 Park Investment, adding that this is natural for a bull market. Although some big techs have reported worse-than-expected results, the generally positive earnings season is fueling investor enthusiasm. More than 25 percent of S&P 500 companies have reported second-quarter results, according to FactSet data.
Investors with macro data
Investors also assessed data on GDP, among other things, which turned out to be higher than expected. The US Department of Commerce reported in its first calculation that the US gross domestic product in the second quarter increased by 2.8 percent in annualized terms (SAAR) quarter over quarter. Expectations were 2.0 percent. This data is published less than a week before the next Fed meeting. Investors are mostly predicting that the central bank will leave interest rates at their current level, although expectations for a September rate cut are growing.
The number of people applying for unemployment benefits for the first time in the US last week was 235,000. Economists had expected the number of new unemployed to be 237,000, up from 245,000 previously, after a revision from 243,000. In turn, weaker-than-expected data on durable goods orders increased hopes for an earlier interest rate cut by the Federal Reserve. The US Department of Commerce reported in its first calculation that durable goods orders in the US fell 6.6% m/m in June, down from an expected 0.3% increase and a 0.1% increase a month earlier.
Cars, Oil and Obesity Drugs
Ford fell more than 18% after second-quarter adjusted profit missed estimates as the automaker continues to battle costly quality issues and an electric-vehicle business that have weighed on its financial results. Other companies in the sector also fell, with General Motors down 5% and Stellantis down nearly 8%.
IBM rose 4% after reporting better-than-expected second-quarter revenue and raising its full-year growth forecast for its software business. Shares of software company ServiceNow rose more than 13% after reporting better-than-expected second-quarter results. Edwards Lifesciences fell 31% after reporting lower-than-expected second-quarter revenue.
Viking Therapeutics rose more than 28 percent after news that it had advanced its experimental obesity drug VK2735 to a Phase III clinical trial. The company said that Phase II trials of the oral version of the drug would begin in the fourth quarter. In the oil market, WTI contracts for August rose 0.82 percent to $78.23 per barrel, while August Brent futures rose 0.77 percent to $82.34/b.
