Stock Market Today: Stocks Retreat From Recent Highs
All but one sector finished in the red Thursday amid Fed stimulus concerns, a string of ugly earnings reports and Middle East unrest.
The news wire didn't give Wall Street much to cheer about Thursday, sending the major indexes to modest losses.
Ahead of Friday's Federal Reserve symposium in Jackson Hole, Wyoming, Kansas City Fed President Esther George told CNBC that pulling back on monetary stimulus soon was "appropriate given the progress we've seen."
That said, it's possible we might not see that particular brand of firework tomorrow.
"We doubt he will shed much light on the precise timing of tapering asset purchases given the uncertain impact of the latest COVID wave on the economy," says Sal Guatieri, senior economist for BMO Capital Markets.
Also of concern: an attack near the Kabul, Afghanistan, airport that killed at least 12 U.S. service members and wounded 15 at last check. And on the economic front, weekly jobless claims edged up by 4,000 filings to 353,000.
The earnings calendar wasn't much relief, either.
Dollar Tree (DLTR, -12.1%) dropped after it reported disappointing Q2 revenues and cut full-year profit estimates to below analysts' expectations. Rival Dollar General's (DG, -3.8%) 2021 earnings forecast also came in under the bar. Global design software firm Autodesk (ADSK, -9.4%) provided a similar letdown as its third-quarter profit guidance missed the mark.
Broadly speaking, stocks started relatively flat and crept lower throughout the rest of the day. Real estate was the only sector to finish with gains, and those were marginal.
The Dow Jones Industrial Average (-0.5% to 35,213), S&P 500 (-0.6% to 4,470) and Nasdaq Composite (-0.6% to 14,945) all closed in the red.
Other news in the stock market today:
- The small-cap Russell 2000 dropped by 1.1% to 2,213.
- Salesforce.com (CRM, +2.7%) was one of Thursday's few positive earnings stories. The Slack parent reported adjusted earnings per share of $1.48 on revenues of $6.34 billion, which was higher than the 92 cents per share and $6.24 billion that analysts were anticipating. CRM also offered higher-than-expected current-quarter guidance and boosted its full-year forecast after completing its acquisition of business communication platform Slack in the second quarter. The results prompted Mizuho Americas analysts to lift their 12-month price target on Salesforce by $10 to $300. They also have a Buy rating on the shares. "Looking ahead, we believe CRM is very well-situated to help its vast customer base manage revenue and process optimization via digital transformation," they wrote in a research note. "CRM remains one of our top picks over the near term."
- Pure Storage (PSTG, +13.8%) also turned in a well-received earnings report. In its second quarter, the maker of flash memory-based enterprise storage solutions brought in adjusted earnings of 14 cents per share and revenue of $496.8 million. This was more than the 5 cents per share and $469.5 million analysts were expecting. Additionally, subscription revenue jumped 31% year-over-year to $171.9 million. "We see a favorable risk/reward equation for Pure Storage, especially given the still solid growth prospects in the business, market share gains and rising mix of subscription sales," William Blair analysts said after PSTG's results. They have an Outperform (Buy) rating on the stock.
- U.S. crude futures gave back 1.4% to finish at $67.42 per barrel.
- Gold futures edged up 0.2% to settle at $1,795.20 an ounce.
- The CBOE Volatility Index (VIX) spiked by 12.2% to 18.84.
- Bitcoin prices retreated 3.7% to $46,974.65. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
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