US STOCKS-S&P, Nasdaq end lower in fickle trading, megacap trend uncertain

SGH

25/07/2024 21:51

* 
      US economic growth regains steam in Q2; inflation slows
    

        * 
      Ford slumps as higher costs, EV unit dent profit growth
    

        * 
      IBM gets boost from software, AI demand, as consulting
slips
    

        * 
      Gains for small-cap indexes Russell 2000 and S&P Small Cap
600
    

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      Indexes: Dow up 0.2%, S&P down 0.51%, Nasdaq 0.93% lower
    

  
 (Updates with closing prices)
    By David French
       July 25 (Reuters) - 
    The S&P 500 and Nasdaq Composite ended a fickle session
weaker on Thursday, failing to regain ground lost in the
previous day's tech-triggered sell-off as investors grappled
with the likely direction of megacaps.
  
    The Dow Jones Industrial Average hung onto early gains to
close higher on stronger-than-expected U.S. gross domestic
product data.
        Small-cap stocks also rose as investors sought out value
away from the megacaps, with the Russell 2000  .RUT  rising 1.3%
to partially recoup some of Wednesday's losses. 
    Megacap stocks recovered from a shaky start to trade higher
at mid-afternoon but many slipped later, with Meta Platforms
 META.O  Microsoft  MSFT.O  and Nvidia  NVDA.O  ending between
1.7% and 2.4% down.
    Alphabet's  GOOGL.O  shares fell for a second straight day,
dipping 3.1% to its lowest close since May 6, but Tesla  TSLA.O 
rose. Lackluster earnings from the Google parent and the
electric vehicle maker had pummeled the so-called Magnificent
Seven group of tech stocks on Wednesday, prompting the Nasdaq
 .IXIC  and S&P 500  .SPX  to log their worst day since 2022.
    The Cboe Volatility Index  .VIX , known as Wall Street's
fear gauge, extended its recent gains to close at 18.46, a fresh
14-week high.
    "I think the market is kind of lurching," said Yung-Yu Ma,
chief investment officer at BMO Wealth Management. "The concern
had been building and yesterday was a bit of a crescendo of that
concern, but some of that has been alleviated today."
    While investors are still trying to grapple with Wednesday's
disappointing earnings reports, and political and economic
uncertainty, Ma said ultimately recent data shows a resilient
U.S. economy.
    Thursday's GDP report showed the U.S. economy expanded 2.8%
in the second quarter versus an estimate of 2%. Inflation
subsided, leaving expectations of a September Federal Reserve
interest rate cut intact.
    All eyes are now on Friday's personal consumption
expenditures price data to confirm bets of an early start to Fed
rate cuts.
    While heavyweight stocks have powered the market to all-time
highs this year, Wednesday's sell-off reinforced fears that
these stocks might be over-stretched and are in for more
turbulence.
    This concern has driven value investors, speeding up their
rotation into smaller-cap stocks and other sectors outside
megacap technology.
    The S&P Small Cap 600  .SPCY  rose 1.4% on Thursday.
    The S&P 500  .SPX  lost 27.91 points, or 0.51%, at 5,399.22
points, while the Nasdaq Composite  .IXIC  fell 160.69 points,
or 0.93%, to 17,181.72. The Dow Jones Industrial Average  .DJI 
rose 81.20 points, or 0.20%, to 39,935.07.

 
    Among earnings-driven moves, IBM  IBM.N  shares jumped 4.3%,
also boosting the blue-chip Dow, after the tech company beat
estimates for second-quarter revenue and raised the annual
growth forecast for its software business.
    American Airlines  AAL.O  rose 4.2% after cutting its annual
profit forecast. Southwest Airlines  LUV.N  climbed 5.5% after
saying it would implement changes including ending open seating
and offering seats with extra legroom.
    Advances by airlines and logistics firms, with Old Dominion
 ODFL.O  up 5.7% and J B Hunt  JBHT.O  rising 4.3%, helped the
Dow Jones Transportation Average  .DJT  gain 1.3%. 
    Ford  F.N  slumped 18.4% after the automaker's
second-quarter adjusted profit missed estimates by a wide
margin. Edwards Lifesciences  EW.N  tumbled 31.3% after it
missed second-quarter revenue estimates.
    Volume on U.S. exchanges was 13.23 billion shares, compared
with the 11.60 billion average for the full session over the
last 20 trading days.

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S&P500 breaks calm streak with 2%+ drop    https://tmsnrt.rs/3A8anwg
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 (Reporting by Ankika Biswas, Lisa Pauline Mattackal and Medha
Singh in Bengaluru and David French in New York; Editing by
Savio D'Souza, Saumyadeb Chakrabarty, Pooja Desai and Richard
Chang)
 ((Ankika.Biswas@thomsonreuters.com))