US Stocks Extend Losses as AmEx Is Dow's Worst Performer
New York (July 23) Stocks extended losses on Thursday afternoon as investors digested a range of earnings.
The S&P 500 was down 0.47%, and the Nasdaq slid 0.29%. The Dow Jones Industrial Average fell 0.57% or 102 points.
"The 70 companies reporting today will make it the busiest day in terms of earnings of the week and with hallmark names including Dow (DOW), McDonald's (MCD - Get Report), Caterpillar (CAT - Get Report), Eli Lilly (LLY), GM (GM - Get Report), and 3M (MMM), we anticipated ample focus on the process," wrote CRT Capital analysts in a note.
American Express (AXP) was the worst performer on the Dow, pulling 3% lower after reporting a mixed quarter. The credit card company earned $1.42 a share, a dime above estimates, while revenue of $8.28 billion fell more than 4% and missed expectations by $180 million.
Caterpillar also pressured the Dow, falling more than 1% as quarterly sales plummeted 13% to $12.32 billion and missed estimates by $300 million. The company cut revenue guidance to $49 billion from $50 billion due to the effects of a stronger U.S. dollar.
McDonald's, another Dow component, beat earnings estimates on the top- and bottom-lines in its recent quarter. The fast food chain earned $1.26 a share, 2 cents higher than expected, while revenue of $6.94 billion beat by $40 million. However, shares fell more than 1% as total sales dropped nearly 10%, driven by a 2% decline in U.S. traffic.
SanDisk (SNDK) surged more than 16% after reporting net income double expectations. The flash storage developer earned 66 cents a share in its second quarter, 33 cents above estimates. Revenue of $1.24 billion beat estimates by $40 million, despite a 24% drop from a year earlier.
General Motors surged more than 6%, minimizing losses on the S&P 500 after it earned an adjusted $1.29 a share in its second quarter, up 122% from a year earlier. The company posted second-quarter North America pretax profit in the second quarter of $2.8 billion.
Comcast (CMCSA) reported stronger-than-expected sales, up 11.3% to $18.74 billion. Total revenue per customer increased 4.5%. Filmed entertainment nearly doubled revenue to $2.3 billion, driven by the success of Jurassic World.
Eli Lilly delivered a better-than-expected second quarter as net income and revenue exceeded estimates and earnings guidance was increased. The drugmaker expects full-year earnings between $3.20 and $3.30 a share, up from previous guidance of $3.10 to $3.20.
Under Armour (UA) jumped nearly 8% after reporting strong growth across its segments in the second quarter. Revenue surged 28.5% to $783.58 million as apparel revenue rose 23% and footwear revenue climbed 40%.
Qualcomm (QCOM - Get Report) shares fell 3% after the company posted light guidance. The chipmaker expects fourth-quarter revenue of $4.7 billion to $5.7 billion and net income of 75 cents to 95 cents a share. Both are below consensus of $6.13 billion in revenue and $1.08 a share in profit.
Separately, the company announced it is cutting 15% of its work force as part of a strategic realignment plan. The restructure will eliminate around $1.4 billion in spending.
Dow Chemical reported a mixed quarter, beating earnings estimates but missing revenue projections. Sales tumbled 13.5% to $12.9 billion due to lower oil prices and currency exchange.
In deal news, Cigna (CI) added more than 2% on reports Anthem (ANTM) is nearing a deal to buy the health insurance company for $187 a share, or more than $40 billion. The deal could be announced on Thursday, according to Dow Jones.
Pearson (PSO) added 2% after confirming Japan's Nikkei had purchased the Financial Times for $1.29 billion.
Apple (AAPL - Get Report) rebounded more than 1% on Thursday after a 4.3% post-earnings decline a day earlier. Microsoft (MSFT), Alibaba (BABA) and IBM (IBM) gained ground, while the Technology SPDR ETF (XLK) added 0.6%.
West Texas Intermediate crude fell 0.4% to $49.02 a barrel on Thursday afternoon as a surprise increase in crude inventories on Wednesday continued to pressure commodities. Crude took a dive last week after six world powers agreed to a nuclear deal with Iran that would lead to Iranian oil on global markets.
Weekly initial jobless claims in the U.S. slid 26,000 to 255,000, the lowest level since 1973, in the week ended July 18. Economists expected the number of new claims for unemployment benefits to fall just 3,000 to 279,000.