Markets News, July 23, 2024: Major Stock Indexes End Lower Ahead of Mega-Cap Tech Earnings

Biggest S&P 500 Movers on Tuesday

2 hr 31 min ago

Decliners

• United Parcel Service (UPS) shares plunged 12.1%, suffering the heaviest losses of any S&P 500 stock, after the package delivery giant’s second-quarter sales and profits fell short of expectations. Softness in freight demand and pricing issues across the shipping sector contributed to the weakness during the quarter. UPS also trimmed its full-year revenue guidance and operating margin forecast, citing the impact of lower-profit shipments from new e-commerce customers.
• Shares of Paccar (PCAR) dropped 11.0% as the commercial truck designer and manufacturer’s second-quarter profits declined year over year and fell shy of analysts’ forecasts. While the company is working to expand its portfolio with emissions-free vehicles, elevated levels of capital spending dragged on Paccar’s performance during the quarter, in addition to inflationary pressure and softness in freight markets.
• A.O. Smith (AOS) shares slipped 9.4% in the wake of the water heater and boiler manufacturer’s quarterly earnings report. Although revenue came in ahead of estimates and earnings per share (EPS) matched expectations, softness in the real estate market and elevated steel prices weighed on the results.

Advancers

• Pentair (PNR) shares jumped 9.0%, marking Tuesday’s top performance in the S&P 500, after the water treatment company topped analysts’ estimates with its second-quarter net sales and EPS results. Pentair also boosted its guidance for the third quarter, predicting that margin expansion would be stronger than previously forecast as the firm focuses on operational efficiencies amid the challenging macroeconomic environment.
• Shares of financial index and analytics provider MSCI (MSCI) soared 7.9% after the firm reported better-than-expected sales and profits for the second quarter. An increase in recurring subscription revenue helped drive the results, with strong growth in market cap-weighted indexes.

• Sherwin-Williams (SHW) shares also benefitted from a strong earnings report, gaining 6.9% after the paint distributor disclosed its latest quarterly results. Although revenue came in slightly below estimates, adjusted EPS exceeded forecasts, with gains in residential markets counterbalancing softer industrial demand. Sherwin-Williams also boosted its full-year profit guidance.

–Michael Bromberg

NXP Shares Tumble on Weak Guidance

5 hr 28 min ago

Shares in NXP Semiconductors (NXPI) tumbled Tuesday after the Dutch-based chipmaker issued a weaker-than-expected current quarter outlook amid a slowdown in spending by automotive customers and rising geopolitical risks.

NXP shares have oscillated within a rising wedge over the past twelve months, a chart pattern that typically occurs after an uptrend and signals a potential reversal in a security’s price.

Looking ahead, investors should monitor the $248 level, an area where the price will likely find support from the rising wedge’s lower trendline.

The stock was down 8.5% at $259.71 in recent trading, making it one of the biggest decliners on the S&P 500 and Nasdaq Composite.

Read the full technical analysis here.

–Timothy Smith

Spotify Pops on Strong Earnings

7 hr 10 min ago

Spotify (SPOT) shares soared Tuesday after the streaming audio company posted quarterly earnings that surpassed analysts’ expectations.

The company also announced third-quarter revenue projections that were in line with market expectations.

The growth was driven in part by Spotify’s premium subscriber base, which increased 12% year-over-year to 246 million. The growth in Premium subscribers comes as the service’s price is increasing this month.

Spotify shares were up 11% in recent trading, at their highest level since early 2021.

–Andrew Kessel

Interest in Small-Caps Continues to Surge

8 hr 18 min ago

The Russell 2000 is on the move higher again Tuesday, outpacing the gains for major stock indexes.

The morning’s trading follows a surge in interest in smaller shares. DataTrek Research said in a note Monday that, based on Google Trends, searches for “IWM“—the iShares Russell 2000 exchange-traded fund—recently jumped to multiyear highs.

That comes as the index itself has climbed lately, outperforming the S&P 500 over the past month and, according to Goldman Sachs research, posting its best performance against the Nasdaq 100 since 2002 in a recent two-week period.

Some of their recent rise can be attributed to investors’ belief that interest-rate cuts are on the horizon, since lower rates can benefit smaller companies that often carry more debt than their larger counterparts. Second-quarter earnings, however, could take some steam out of smaller shares if they point toward a weaker second half—especially, perhaps, if big companies turn in stronger results.

DataTrek believes small caps can continue to perform. “When that interest and capital flows to an entire segment of the market, we have trouble dismissing it outright as a fad,” its note read. “No doubt U.S. small caps will be volatile over the next few months, but we still believe they can do well” over the balance of the third quarter.

–David Marino-Nachison

GE Aerospace Jumps on Strong Earnings, Guidance Boost

9 hr 40 min ago

GE Aerospace (GE) shares jumped in early trading Tuesday after the company’s second-quarter results exceeded expectations as orders surged.

The aerospace parts maker posted a 4% increase in revenue to $9.1 billion, while net income came in at $1.4 billion.

The company now projects a full-year operating profit between $6.5 billion and $6.8 billion, up from the previous range of $6.2 billion to $6.6 billion. Earnings per share are seen in a range of $3.95 to $4.20, compared to the previous range of $3.80 to $4.05.

Analysts have said that GE Aerospace could be well-positioned to benefit from the growth of the aerospace industry, and that the company’s wide array of products and customers could allow it to weather production difficulties experienced by any one company like Boeing (BA).

The other two former General Electric divisions, GE Vernova (GEV) and GE HealthCare (GEHC), report earnings Wednesday and next week, respectively.

GE Aerospace shares were up more than 8% in mid-morning trading. The stock has gained nearly 75% since the start of the year.

–Aaron McDade

Spot Ether ETFs Start Trading Tuesday

10 hr 10 min ago

Nine spot ether (ETH) exchange-traded funds started trading on U.S. exchanges today. They can be found on Nasdaq, NYSE Arca, and Cboe BZX.

The spot ether ETFs are intended to offer exposure to the price of the ether held by the funds. Ether is the underlying cryptocurrency of the Ethereum network, the second-largest crypto network when measured by market cap.

Buyers of the ETFs are purchasing shares of funds that hold ether on behalf of their shareholders. Different spot ether ETFs use different sources of data when it comes to pricing ether.

Read more here about the launch of spot ether ETFs.

–Kyle Torpey

UPS Shares Plunge to 4-Year Low After Earnings

11 hr 5 min ago

Shares of United Parcel Service (UPS) tumbled in early trading Tuesday after the shipping giant reported disappointing second-quarter earnings amid a continued pullback from pandemic highs for package deliveries.

Revenue from the company’s shipping operations fell just over 1% from the same time last year to $21.8 billion, while net income dropped 32% to $1.41 billion. The top and bottom lines both fell short of analysts’ expectations.

UPS now projects full year revenue of $93 billion, compared to a previously projected range of $92 billion to $94.5 billion. The company also lowered projections for its adjusted operating margin to roughly 9.4% for the year, below previous projections of 10% to 10.6%.

UPS shares were down 12%, leading S&P 500 decliners, trading at their lowest level in four years.

–Aaron McDade

Major Indexes Pointing to Lower Open

12 hr 2 min ago

Futures tied to the Dow Jones Industrial Average were down 0.1%.

S&P 500 futures were also down 0.1%.

Nasdaq 100 futures were off 0.3%.