Stock Market Today: Dow Sinks 533 Points as Mega Caps Slump

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Stocks opened mostly higher Thursday but lost momentum as the session wore on. A continued decline in several mega-cap stocks drove most of the day's price action, while earnings news captured the bulk of the headlines.

As for those earnings, Taiwan Semiconductor Manufacturing (TSM) reported higher-than-expected second-quarter top- and bottom-line results thanks to increased demand for its artificial intelligence (AI) chips. The semiconductor stock was choppy throughout the day, eventually ending with a modest 0.4% gain amid continued concerns the U.S. is considering more restrictions on chip sales to China.

Despite these headwinds, Argus Research analyst Jim Kelleher (Buy) expects "solid company growth as inflation recedes, electronic device demand picks up, and generative AI continues to move into the mainstream."

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Domino's sinks on lower store opening forecast

Domino's Pizza (DPZ), meanwhile, plunged 13.4% after earnings. While the pizza delivery chain's second-quarter earnings of $3.65 per share beat estimates and revenue of $1.1 billion matched what Wall Street was anticipating, it cut its forecast for global store openings by up to 25%. DPZ now expects to open between 825 and 925 stores this year.

D.R. Horton jumps on strong earnings

Elsewhere on the earnings calendar, D.R. Horton (DHI) jumped 10% after the homebuilder disclosed fiscal third-quarter results that came in higher than analysts were expecting.

The company also said the number of homes closed over the three-month period rose 5% year-over-year to 24,155, while home sales orders edged up 1% to 23,000.

CFRA Research analyst Ana Garcia maintained a Buy rating on D.R. Horton after earnings. "Looking ahead, DHI remains bullish, citing its newly approved $4 billion repurchase program," the analyst wrote in a note to clients. "We agree, even in a conservative model, we see further upside for shares."

Intel sails to the top of the Dow

Intel (INTC) was another noteworthy advancer, rising 1.2% to make it the best Dow Jones stock today. The chipmaker has had a rough year, down 30% through Thursday's close.

But this week, INTC is outperforming several of its peers because the company, which is one of the biggest domestic manufacturers of semiconductors, is expected to be less impacted by any additional restrictions on chip sales to China.

Still, considering Intel is trading at around $35 per share, today's gain wasn't enough to boost the price-weighted Dow Jones Industrial Average. Rather, steep declines in big banks JPMorgan Chase (JPM, -3.2%) and Goldman Sachs (GS, -3.1%), as well as Magnificent 7 stocks Apple (AAPL, -2.1%) and Amazon.com (AMZN, -2.2%), had the 30-stock index tumbling 1.3% to 40,665.

The S&P 500 (-0.8% at 5,544) and Nasdaq Composite (-0.7% at 17,871) also closed notably lower, adding to their week-to-date losses.

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With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.