4:23pm: Nasdaq, S&P fall for the third-straight week
The Dow closed Friday up 26 points, less than 0.1%, at 34,501, the Nasdaq Composite slid 26 points, 0.2%, to 13,291 and the S&P 500 lost 1 point to end at 4,370. The small-cap Russell 2000 index added 10 points, 0.5%, to 1,859.
The Nasdaq fell for the fourth-straight session and third-straight week, with the latter occurring for the first time since December. The S&P also fell for the third-consecutive week, its longest such streak since March. The DJIA, meanwhile, suffered its worst individual week since March.
The markets have largely abandoned the heady, optimistic trading days of July.
The Friday laggards included Keysight Technologies, which saw its shares fall nearly 14% on underwhelming earnings. Similarly, Deere and Estee Lauder stock sank 5.3% and 3.3%, respectively, on disappointing results.
12:05pm: Stocks struggle for direction
US stocks were mixed in noon trading as equities continued to struggle in August as 10-year Treasury yields remain elevated.
At midday, the Dow rose 62 points to 34,537 while the S&P 500 eased a single point at 4,370 and the tech-heavy Nasdaq slipped 37 points to 13,280.
“I feel like the markets are rethinking their optimism from July, where we had the soft landing narrative,” Global X ETFs senior portfolio strategist Michelle Cluver said.
Notable movers included shares of Deere & Company, which fell more than 4% even as the company’s 3Q earnings beat estimates.
9.40am: Rate worries continue to knock Big Tech
US markets opened lower as jitters surrounding China’s property crisis added to fears interest rates will stay higher for longer.
Shortly after the opening bell, the Dow Jones Industrial Average was down 94.55, 0.3% at 34,380.28, the S&P 500 was 22.97 points, 0.5%, lower at 4,347.39 and the Nasdaq Composite fell 135.88, 1.0%, at 13,181.05
Fawad Razaqzada at City Index and FOREX.com pointed out: “The major global indices hit fresh weekly lows, reaching their lowest levels in several weeks, causing the VIX – the fear index – to rise to its highest level since May.”
The Dow is on pace for its worst week since March, the S&P 500 is headed for a third straight week of losses, a streak that hasn’t happened since February and the Nasdaq Composite is also set for a third consecutive losing week for the first time since December.
Rate-sensitive big technology and growth stocks such as Apple, Amazon.com and Tesla slipped between even as Treasury yields took a breather.
The yield on the 10-year Treasury note hit a ten-month high of 4.328% in the previous session and came within a whisker of its highest level since 2007. But in early trading on Friday, it eased to 4.270%.
WeWork shares sank 13% after the flexible office space provider announced plans for a 1-for-40 reverse stock split of its outstanding shares of Class A common stock and Class C common stock.
Elsewhere, well received results after the closing bell Thursday are driving Applied Materials and Ross Stores, up 0.6% and 4.8% respectively.
9.10am: Premarket movers
Outback Steakhouse owner Bloomin’ Brands was up around 10% in premarket trade, after it was revealed that activist investor Starboard Value has increased its stake in the company to 9.9%.
Chinese Tesla-challenger Xpeng Inc (NYSE:XPEV) saw its stock slide 6.5% in Friday’s premarket deals as it reported a wider-than-expected net loss for its second quarter.
Estee Lauder Companies Inc (NYSE:EL) confirmed it had been a tough year for the perfume, makeup and skincare group, though things started to improve in the final three months. The stock fell US$10.06 or 6.2% in early deals, to US$152.
Vipshop Holdings Ltd (NYSE:VIPS) has reported second-quarter revenue and earnings that beat expectations as more customers shopped for value for money. At US$15.00 this morning, Vipshop stock was down US$1.23 or 7.58%.
Farfetch Limited (NYSE:FTCH) stock plummeted, losing more than a third, after reporting underwhelming second-quarter revenue.
Shares in Ross Stores Inc (NASDAQ:ROST) rose US$5.84 or 5.17% to trade at US$118.90 in early premarket dealing, after the discount department store chain reported better-than-expected financials.
Applied Materials, Inc. (NASDAQ:AMAT) stock starts Friday on the front foot, as the supplier to the semiconductor sector reported third-quarter 2023 revenue that surpassed market forecasts of $6.15 billion – albeit at $6.43 billion the figure did represent a 1% decline on the prior year comparative.
SpaceX, the spacecraft engineering company owned by Elon Musk, has sold all its holdings in Bitcoin, a Wall Street Journal report revealed, leading to a sharp sell-off late on Thursday and into early Friday trading.
Bitcoin dropped below US$25,000 after the sale was revealed, causing a ripple effect across cryptos and with Bitcoin-related stocks such as Coinbase Global Inc (NASDAQ:COIN), Marathon Digital (NASDAQ:MARA) and Riot Blockchain Inc (NASDAQ:RIOT) also impacted.
7.35am: Monthly stock options expiry to add spice
The expiry of August's stock-market options could add some spice to Friday's trading session already reeling from global events and fears of rising interest rates.
US stock option contracts with a notional value of $2.2 trillion are set to expire, according to traders, about average for an off-month expiration.
Monthly options expire every month as the name suggests, but once a quarter - in March, June, September and December - an event known as "Triple Witching" takes place, causing notional value of expiring options to swell as quarterly and sometimes calendar-year options expire along with monthlies and weeklies.
Sessions where monthly options expire often see higher-than-normal volatility, and options-market analysts warned that the same could happen on Friday.
Investors are already braced for further falls in stocks on Friday with futures for the Dow, S&P and Nasdaq all pointing downwards as the losing streak on Wall Street continues.
7.00am: Further falls expected on Wall Street
US markets look set to open lower, extending their losing run, as China's property crisis deepended and amid fears interest rates would stay inflated for some time to come.
In pre-market trading, futures for the Dow Jones Industrial Average were 0.1% lower, while those for the S&P 500 fell 0.2%, and contracts for the Nasdaq 100 futures were down 0.4%.
AJ Bell investment director Russ Mould said: "News China real estate giant Evergrande has filed for bankruptcy protection in the US would have prompted some alarm in isolation but when you combine it with its peer Country Garden’s decision to suspend payments on some of its bonds and the words ‘dominos’ and ‘falling’ start to come to mind."
Tech stocks look set to bare the brunt of the falls, as fears of higher rates knock the mood, after resilient economic data sparked concerns that inflation could pick up.
Ipek Ozkardeskaya at Swissquote Bank explained the data "fuels worries that with such a strong growth," US inflation could make a "U-turn and take a lift."
Stocks on the move ahead of the open include Farfetch Limited which has plummeted 41% after reporting underwhelming second-quarter revenue.
The London-based luxury brands e-commerce platform posted revenue of $579.34 million, up 1.2% year over year but well behind Street expectations of $649.17 million. Its loss was narrower than expected, at $0.21 per share, versus consensus forecasts of $0.42.
Applied Materials Inc stock starts Friday on the front foot, up 3.2%, as the supplier to the semiconductor sector reported third-quarter 2023 revenue that surpassed market forecasts of $6.15 billion – albeit at $6.43 billion the figure did represent a 1% decline on the prior year comparative.
The semiconductor materials provider also posted earnings per share (EPS) for the period of $1.90, $0.16 better than expectations.
Ross Stores (NASDAQ:ROST) reported earnings of $1.32 per share, compared to $1.11 a year earlier and expectations of $1.16. Revenue came in at $4.9 billion, up from $4.6 billion and compared to projections of $4.75 billion. Shares soared 5.2%.
One company not in the good books with some analysts is Palo Alto Networks Inc which is scheduled to report earnings after the bell on Friday, an unusual move.
“We have seen many strange things in our 23 years covering the tech sector on the Street and thought we have seen it all until Palo Alto decided to host a ‘head scratching’ after the close conference call this Friday to discuss its earnings and medium term guidance,” Wedbush analysts wrote.