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.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
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.
Related content
- When Is the Next CPI Report?
- All 30 Dow Jones Stocks Ranked: The Pros Weigh In
- Are Dividends on the Way Back?
-
Stock Market Today: Dow Logs Longest Losing Streak Since AprilThe November Producer Price Index showed that inflation remains a tough beast to tame.
-
Why Uber Stock Is Volatile After GM's Cruise AnnouncementUber stock is swinging this week following news that General Motors is restructuring its Cruise unit. Here's what you need to know.
-
Stock Market Today: Dow Logs Longest Losing Streak Since April
The November Producer Price Index showed that inflation remains a tough beast to tame.
-
Why Uber Stock Is Volatile After GM's Cruise Announcement
Uber stock is swinging this week following news that General Motors is restructuring its Cruise unit. Here's what you need to know.
-
Why Adobe Stock Is Down After Its Earnings BeatAdobe stock is lower Thursday despite the tech giant beating expectations for its fiscal 2024 fourth quarter. Here's what you need to know.
-
Three Possible Tax Impacts for Retirees Under TrumpHow might a second Trump term affect your tax bill in retirement — or the inheritance tax bill for your heirs? This pro has three predictions.
-
What to Know About Leverage and Bitcoin's Meteoric RiseLeverage in the financial world can lead to astonishing success or a crushing collapse. How are investors using leverage to invest in bitcoin?
-
How Do You Know When It's Time to Change Financial Advisers?Sometimes a breakup is for the best. Here's how to handle 'the talk' and make the switch to a new professional who's a better fit for you.
-
Stock Market Today: Tech Stocks Rally as CPI Supports Lower RatesAn inline inflation report sealed the deal for a December rate cut and sent the tech sector soaring.
-
CPI Report Casts Doubt on Rate Cuts in 2025: What the Experts Are Saying About InflationCPI November Consumer Price Index data sealed the deal for a December rate cut, but the outlook for next year is less certain.
