2024-07-25 00:57:24
Succeeded in massive liquidations Wall Street in today’s session, under the weight of the quarterly results of two leading technology companies, leading him S&P 500 in its worst daily performance since December 2022.
The index lost 2.31% of its value, closing at 5,427.13 points. THE Nasdaq plunged 3.64% in its worst session in 2024, ending at 17,342.41. The Nasdaq 100 fell 4%. THE Dow Jones fell 504.22 points or 1.25% to 39,853.87 points.
Shares in Google parent Alphabet fell 5%, their biggest one-day drop since January 31, when they had slipped 7.5%. Although Alphabet reported better-than-expected results, YouTube ad revenue fell short of expectations. At the same time, Tesla stock fell 12.3% in its worst session of 2024 in the wake of worse-than-expected results.
The course of Alphabet and Tesla was followed by other major technological companies. Nvidia and Meta Platforms lost 6.8% and 5.6% of their value at the same time, while Microsoft fell 3.6%.
Today’s sell off was caused by the “perfect storm” of an overbought market, excessively high earnings expectations and the seasonally weak period for stocks. That’s why this retreat didn’t surprise investors so much, according to Baird strategist Ross Mayfield.
“Tech’s problem is not that earnings are less than perfect, but that the sector has been hit by a sharp shift by investors to other sectors that have been lagging until now, and this has happened after the consumer price data,” explains a Vital Knowledge analyst. .
The Russell 2000 small-cap index fell 2.1%. For the month, it’s up 7.2% as investors shifted from large-cap tech names to smaller stocks. The Dow is up 1.9% so far in July, while the S&P 500 is down 0.6% and the Nasdaq is down 2.2%.
Despite the fact that the big names in technology did not meet the expectations of the analysts, in general the period of announcements of second quarter corporate results got off to a strong start. More than 25 percent of S&P 500 companies have reported second-quarter results, with 80 percent beating analysts’ estimates, according to FactSet data.
Worse-than-expected U.S. manufacturing data also added to investor concerns. The manufacturing PMI fell to 49.5 in July, showing an unexpected contraction as new orders fell.