The blue-chip Dow Jones Industrial Average fell from a record high on Wednesday as the momentum from the strong earnings season stated to fade.
The 30-stock average dipped 80 points, falling for the first time in four days. The S&P 500 traded near the flatline, while the tech-heavy Nasdaq Composite traded 0.5% higher amid a jump in Microsoft shares.
Microsoft and Alphabet were among the headline reports after the bell Tuesday, with both topping revenue expectations. Microsoft shares rose 3.8%.
General Motors shares fell more than 1% even after the industrial giant topped Wall Street’s earnings and revenue estimates for the third quarter.
Boeing saw its stock rising slightly after the company reported better-than-expected free cash flow. The aircraft maker posted a wider-than-expected loss, however.
Robinhood shares were getting slammed, down 11% the day after the trading app reported revenue well below expectations primarily due to weakness in crypto trading.
So far roughly 30% of the S&P 500 has reported earnings. Of the names that have posted quarterly updates, 82% have topped earnings expectations, while 80% have exceeded revenue estimates. Strong results have been key to pushing the major averages to new highs.
“This earnings season has been about pricing momentum and whether consumers are able to handle surging costs,” noted Ed Moya, senior analyst at Oanda. “So far it seems the consumer can handle it,” he added.
Texas Instruments shares tumbled 4% after the company missed revenue estimates while Visa fell 2.5% despite beating on the top and bottom lines. Enphase Energy leaped 12.7% after reporting record revenue in face of supply chain headwinds.
Coca-Cola rose 2.6% after the company posted a beat on the top and bottom lines and raised its outlook, saying the business was getting stronger particularly in areas where the Covid recovery has been the best.
“We see signs that there could be more gains to come in the final two months of the year,” said Ryan Detrick, chief market strategist for LPL Financial. “Seasonal tailwinds, improving market internals, and clear signs of a peak in the Delta variant all provide potential fuel for equities heading into year-end, and we maintain our overweight equities recommendation as a result.”