21-7-2023 (NEW YORK) U.S. stocks ended mixed on Thursday as investors weighed a batch of disappointing earnings from technology companies. The Dow Jones Industrial Average rose 0.47 percent to 35,225.18, while the S&P 500 lost 0.68 percent to 4,534.87. The Nasdaq Composite Index dropped 2.05 percent to 14,063.31.
Although seven of the 11 primary S&P 500 sectors ended in the green, the consumer discretionary and communication services sectors led the laggards. Consumer discretionary and communication services lost 3.40 percent and 2.49 percent, respectively. Meanwhile, utilities and healthcare led the gainers, rising 1.85 percent and 1.65 percent, respectively.
The Dow Jones Industrial Average rose for a ninth consecutive session on Thursday after encouraging earnings results from its constituents. Johnson & Johnson shares surged more than 6 percent after the drugmaker posted better-than-expected quarterly results. IBM shares also rose 2.14 percent after its earnings beat expectations.
However, a selloff in shares of Netflix and Tesla weighed on the S&P 500 and the Nasdaq on Thursday. Netflix dropped more than 8.4 percent, while Tesla shares tumbled 9.7 percent, its worst day since April, after the electric vehicle maker reported a drop in operating margins.
The tech-heavy Nasdaq was down nearly 300 points on Thursday, marking the index’s worst day since February. The post-earnings declines in the shares of big tech companies highlighted the risks of market breadth this year, as most of this year’s gains have been driven by a small group of mega-cap tech names.
Edward Moya, senior market analyst at OANDA, a supplier of online multi-asset trading services, said that the Dow’s best winning streak since 2017 is impressive given that the AI trade still appears to be in an early cycle. “Market breadth seems like it wants to improve as the mega-cap tech trade takes a break,” he said.
Investors also digested the latest labor market data released on Thursday, which provided further insight into the Federal Reserve’s monetary policy path. U.S. initial jobless claims fell by 9,000 to 228,000 in the week ending July 15, reaffirming that the U.S. jobs market is quite resilient and boosting expectations of another hike in interest rates this year, according to Labor Department data published on Thursday.
