US STOCKS-S&P 500, Nasdaq stumble on caution ahead of tech earnings

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30/07/2024 21:54

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      Job openings stood at 8.18 million in June 
    

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      Procter & Gamble drops on sales expectations miss
    

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      Merck down after cutting annual profit forecast
    

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      Indexes: Dow up 0.5%, S&P 500 down 0.5%, Nasdaq down 1.28%
    

  
 (Updated at 4:25 p.m. ET/2025 GMT)
    By Chuck Mikolajczak
       NEW YORK, July 30 (Reuters) - 
    The S&P 500 and Nasdaq closed lower on Tuesday, weighed down
by weak chip and megacap shares ahead of earnings from
heavyweight tech companies this week, but the Dow managed modest
gains.
  
    Microsoft  MSFT.O , seen by many as leading the artificial
intelligence race, fell 0.89% to $422.92 ahead of its quarterly
results. After the closing bell, the software maker dropped
about 5% after reporting results that missed expectations for 
quarterly growth in its Azure cloud-computing service. 
        Chipmaker Nvidia  NVDA.O , regarded as a prime
beneficiary of potential AI growth and the year's second best
S&P 500 performer, tumbled 7.04% to $103.73, weighing on other
chip stocks to pull the Philadelphia semiconductor index  .SOX 
down 3.88%.
  
    Other megacap names such as Apple  AAPL.O , Amazon.com
 AMZN.O  and Meta Platforms  META.O , are all due to report
earnings this week. Apple edged up 0.26% to $218.80, but Amazon
slipped 0.81% to $181.71 and Meta shed 0.54% to $463.19 on
valuation concerns.
        "A lot of people are looking at artificial intelligence
now and saying this is all great but I how do I make money on
it," said Stephen Massocca, senior vice president at Wedbush
Securities in San Francisco.
  
        "Financially the companies are probably doing quite
well, but the question is what are you paying for this? These
are not cheap stocks and so you need to go into these things
with your eyes open."
  
        The Dow Jones Industrial Average  .DJI  rose 203.40
points, or 0.5%, to 40,743.33, the S&P 500  .SPX  lost 27.10
points, or 0.5%, to 5,436.44 and the Nasdaq Composite  .IXIC 
lost 222.78 points, or 1.28%, to 17,147.42. 
    The small cap Russell 2000  .RUT  gained 0.35% and the S&P
value 500 index  .IVX  advanced 0.52%, buoyed by financials
 .SPSY , which jumped 1.19% to outperform the broader market.
This extended a recent rotation out of more expensive stocks as
the market has solidified expectations the Federal Reserve will
cut rates this year on signs of moderating inflation.
    Energy  .SPNY , up 1.54%, and financials were the best
performing of the 11 major S&P sectors while technology
 .SPLRCT , down 2.2%, was the weakest.
    Megacap stocks fell last week on Tesla's disappointing
results and Alphabet's higher expenditure forecast, prompting a
broad-based market sell-off.
    The market is betting on a slight chance that the Fed will
cut rates by at least 25 basis points at the end of its
policymaking meeting on Wednesday, but it is completely pricing
in a cut for the U.S. central bank's September meeting, CME's
FedWatch Tool showed.
        Several labor data releases are scheduled for this week,
culminating in Friday's government payrolls report. On Tuesday,
a Job Openings and Labor Turnover Survey pointed to 8.18 million
job openings in June, compared to economists' expectation of 8
million.
    
    Among single stocks, Procter & Gamble  PG.N  lost 4.84% at
$161.70 after missing fourth-quarter sales expectations. 
        Merck  MRK.N  plunged 9.81% to $115.25 after the
drugmaker cut its annual profit forecast. CrowdStrike  CRWD.O 
dropped 9.72% to $233.65 after a report that Delta Air Lines
 DAL.N  sought compensation from the cybersecurity firm and
Microsoft for the carrier's global cyber outage earlier this
month.
    Cybersecurity and cloud services company F5  FFIV.O  surged
12.99% to $200.66 after forecasting fourth-quarter results above
estimates.
    Advancing issues outnumbered decliners by a 1.54-to-1 ratio
on the NYSE. On the Nasdaq declining issues outnumbered
advancers by a 1.16-to-1 ratio. 
        The S&P 500 posted 73 new 52-week highs and one new low
while the Nasdaq Composite recorded 133 new highs and 126 new
lows.
  
        Volume on U.S. exchanges was 11.25 billion shares,
compared with the 11.19 billion average for the full session
over the last 20 trading days.
  
    

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 (Reporting by Chuck Mikolajczak; Editing by Richard Chang)
 ((charles.mikolajczak@tr.com; @ChuckMik))