Stock Market Today: Salesforce Earnings Drag Dow Down 330 Points
Salesforce notched its biggest one-day loss in nearly 20 years after the SaaS firm's Q1 revenue fell short.
Stocks closed lower Thursday as investors took in a number of disappointing corporate earnings reports and looked ahead to tomorrow's key inflation update.
The Dow Jones Industrial Average suffered a notable loss today as Salesforce (CRM) crumbled after earnings, but the blue chip stock was hardly the day's biggest loser.
To be sure, CRM's 19.7% tumble was the largest one-day loss for the Dow Jones stock since 2004. The drop came after the software-as-a-service (SaaS) firm missed on the top line in its fiscal first quarter and gave weak second-quarter guidance.
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But Kohl's (KSS) plunged 22.9% – its worst day on record – after the department store chain reported a surprise loss in its fiscal first quarter The company's revenue for the quarter also fell short of estimates as same-store sales slumped 4.4%.
"Our first-quarter results did not meet our expectations and are not reflective of the direction we are heading with our strategic initiatives," CEO Tom Kingsbury said in the earnings release.
UiPath (PATH), meanwhile, plummeted 34% as news the automation company's CEO is resigning at the end of this week more than offset a fiscal first-quarter earnings beat. PATH also lowered its full-year forecast.
"These developments suggest that the business is in transition and will raise concerns that artificial intelligence is weakening the company's moat versus strengthening it," says Oppenheimer analyst Brian Schwartz (Neutral, the equivalent of Hold.)
HP pops on earnings beat
However, it wasn't all doom and gloom on the earnings front. HP (HPQ) shares jumped 17% after the PC and printer maker posted higher-than-expected fiscal Q3 results. Additionally, the company expects sales of its AI PCs and workstations will start ramping up in its upcoming fiscal year.
HPQ, which happened to be a member of Warren Buffett's Berkshire Hathaway portfolio until earlier this year when the holding company exited its stake in the tech stock, has turned in a solid performance in 2023. Year-to-date, shares are up 27.5%.
Best Buy (BBY, +13.4%) and Foot Locker (FL, +14.9%) were also notable post-earnings gainers.
As for the main indexes, the Dow fell 0.9% to 38,111, the S&P 500 shed 0.6% to 5,235, and the Nasdaq Composite gave back 1.1% to 16,737.
Q1 GDP gets downwardly revised
The losses came even as a downwardly revised first-quarter gross domestic product (GDP) (1.3% vs 1.6% initial reading) boosted expectations that the Federal Reserve could start cutting interest rates as soon as September.
Indeed, according to CME Group's FedWatch Tool, futures traders are now pricing in a 45% chance the Fed will cut rates by a quarter-percentage point in September, up from 42.1% one day ago.
More clarity will come on the issue tomorrow with the release of the April Personal Consumption and Expenditures (PCE) Price Index – the Fed's preferred measure of inflation that tracks consumer spending.
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