Dow Jones Today: Stocks Slip After Flurry of Earnings Reports; GE Tanks, GM Soars, Nvidia Retreats from Record
· InvestopediaMajor U.S. stock indexes were slightly lower in afternoon trading Tuesday as investors digested a slew of quarterly earnings reports from major companies.
The S&P 500 was down 0.2%, while the Dow Jones Industrial Average and Nasdaq Composite were both off fractionally. The Dow and S&P 500, which entered the week at record high levels, fell on Monday, while the tech-heavy Nasdaq finished in positive territory as AI investor darling Nvidia (NVDA) soared to a record high.
Nvidia shares were down about 0.5% on Tuesday as the company gets closer to overtaking Apple (AAPL), which was down a similar amount, as the world's most valuable company by market capitalization. Other large-cap technology stocks, including Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN) and Meta Platforms (META), were gaining ground.
Among the stocks on the move after companies released quarterly results, GE Aerospace (GE) was down 8%, Verizon (VZ) dropped more than 4% and 3M (MMM) fell 1%, while General Motors (GM) added more than 9%.
The economic data calendar is quiet on Tuesday ahead of reports on housing, the labor market and consumer sentiment later in the week. Investors are closely monitoring economic data and remarks from Federal Reserve officials for indications that the economy remains on sound footing and that the central bank is poised to continue cutting interest rates.
The yield on 10-year Treausurys, which is sensitive to expectations around interest rates, continued rising Tuesday after surging yesterday to its highest level since late July. The yield was at 4.20% in recent trading, up from 4.18% late Monday.
Gold futures were up 0.7% at around $2,760 an ounce, as the precious metal continues to trade at record-high levels. Crude oil futures were up more than 2%, continuing to recover from last week's steep losses. Bitcoin was down slightly, trading around $67,000,
Genuine Parts Plunges on Weak Profit, Outlook
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Genuine Parts Co. (GPC) is the biggest decliner in the S&P 500 Tuesday after its third-quarter net income fell well short of estimates and it lowered its profit projections for the full fiscal year.
The parent of NAPA Auto Parts and other brands narrowly beat consensus revenue estimates at $5.97 billion, but profit of $226.6 million fell well short of the $338.4 million expected by analysts polled by Visible Alpha.
"Our results were below our expectations, primarily driven by continued weakness in market conditions in Europe and our Industrial business," GPC Chief Executive Officer (CEO) Will Stengel said. "While the external environment remains challenging for the balance of 2024, we expect the combination of near-term actions and long-term investments to better position us when market conditions improve."
For the full fiscal year, GPC projects earnings per share (EPS) between $6.60 to $6.80, well below its previous range of $8.55 to $8.75. GPC also lowered the top of its total sales growth range to 2% from 3%, and now sees industrial sales declining by 1% to 2% from flat to 2% growth previously.
GPC shares were down nearly 20% early Tuesday afternoon, trading at their lowest levels since early 2021.
GE Aerospace Slides as Commercial Engine Sales Disappoint
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GE Aerospace (GE) fell sharply Tuesday morning as revenue in its commercial engines and services division fell short of analysts' expectations, even though its overall revenue and profit beat estimates.
The engine and aerospace parts manufacturer posted $9.84 billion in total revenue, while analysts polled by Visible Alpha had a consensus estimate of $9.55 billion. Net income was $1.89 billion, or $1.56 per share, compared with the estimated $1.28 billion and $1.19.
However, GE Aerospace’s commercial engines and services revenue came in at $7.00 billion, below the $7.13 billion expectation. Revenue in the smaller defense and propulsion segment of $2.24 billion also missed estimates of $2.34 billion.
The company lifted its profit projections for full-year 2024, guiding adjusted earnings per share (EPS) to a range of $4.20 to $4.35, up from $3.95 to $4.20 previously.
GE Aerospace shares were down more than 7% in late-morning trading and were among the biggest decliners in the S&P 500. Despite today's decline, the stock is still up about 30% since the early April split from GE Vernova (GEV).
GM Stock Soars on Strong Results, Outlook Boost
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General Motors (GM) shares surged Tuesday after the biggest U.S. carmaker posted better-than-expected results and raised its profit guidance on steady pricing and cost controls.
The company reported third-quarter adjusted earnings per share (EPS) of $2.96, with revenue increasing more than 10% to $48.76 billion. GM also increased the low ends of its full-year net income, adjusted earnings before interest and taxes (EBIT), and EPS guidance.
In a letter to shareholders, Chief Executive Officer (CEO) Mary Barra wrote that during the quarter GM showed higher profitability from EVs and its redesigned SUVs, improved performance in China, and cost discipline along with a focus on capital efficiency.
JPMorgan said in a note to clients that the company benefited from "stronger-than-expected industry pricing and stronger pricing for GM vehicles relative to the industry." Wedbush analyst Dan Ives said that the results were a testament to the company's goals of trying to balance production and profitability, calling it "a large step in the right direction as management continues to navigate the choppy waters."
GM shares were up 8% in recent trading, at their highest levels since early 2022.
Nvidia Price Levels to Watch With Stock Near Record High
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Nvidia (NVDA) shares were up slightly in early trading Tuesday after surging to a new record high yesterday amid optimism about the company’s dominance of the AI chip market and insatiable demand for its next-generation Blackwell GPU architecture.
The relative strength index indicates bullish price momentum and gives a reading below overbought levels, suggesting the stock has ample room to test higher prices.
A bars pattern, which extracts the stock's trend higher from April to June and repositions it from the start of the current move higher in early September, projects an upside target on Nvidia's chart around $180.
During periods of weakness, investors should monitor important support levels around $125, $97, and $76.
Nvidia shares were up 0.3% at around $144 in recent trading.
Read the full technical analysis piece here.
Futures Point to Lower Open for Major Stock Indexes
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Futures tied to the Dow Jones Industrial Average were down 0.3%.
S&P 500 futures were down 0.4%.
Nasdaq 100 futures were also down 0.4%.