Market Wrap: Wall Street Ends Lower as Tech Stocks Weigh

Before you go, we thought you'd like these...
Before you go close icon
Volatile Day Of Trading Leaves Dow Closing 180 Points Down
Spencer Platt/Getty Images
By Chuck Mikolajczak

NEW YORK -- Wall Street declined for a second straight session Wednesday as the technology sector fell on disappointing results from giants including Apple.

Apple (AAPL) shares slumped 4.3 percent to $125.14, a day after the iPhone maker's revenue forecast for the fourth quarter fell below expectations, its biggest percentage drop since January 2014.

The world's largest publicly-traded company was the biggest drag on all three major indexes and contributed nearly 37 points to the Dow's overall decline. The S&P technology sector fell 1.6 percent as the worst performing of the 10 major S&P sectors.

%VIRTUAL-pullquote-We are getting a little bit of indigestion in the market over the past two sessions from tech earnings.%Microsoft (MSFT) fell 3.7 percent, its biggest percentage drop since January, to $45.54 after reporting its biggest-ever quarterly loss, as the company wrote down its Nokia phone business and demand fell for its Windows operating system.

"We are getting a little bit of indigestion in the market over the past two sessions from tech earnings," said David Schiegoleit, managing director of investments at the Private Client Reserve of U.S. Bank in Los Angeles.

"We stepped right into the beginning of this week with IBM disappointing, followed by Microsoft, Apple and a couple of others, so we are just getting a little bit of heartburn in the market from those earnings releases on the tech side."

Yahoo (YHOO) shed 1.2 percent at $39.24 after it forecast lower-than-expected revenue for the current quarter as it struggles to revive its core online advertising business.

The Dow Jones industrial average (^DJI) fell 68.25 points, or 0.4 percent, to 17,851.04, the Standard & Poor's 500 index (^GSPC) lost 5.06 points, or 0.2 percent, to 2,114.15 and the Nasdaq composite (^IXIC) dropped 36.35 points, or 0.7 percent, to 5,171.77.

Earnings Drop

While markets remain near record highs, June-quarter S&P 500 earnings are expected to fall 1.5 percent, according to Thomson Reuters (TRI) data, well below the 5.9 percent gain forecast on Jan. 1, but above the 3-percent decline expected at the start of July.

Of the 102 companies to report through Wednesday morning, 70 percent beat earnings expectations, matching the rate over the past four quarters and above the 63-percent average beat rate since 1994.

However, only 55 percent have topped revenue forecasts, below the 61-percent average beat rate since 2002. U.S. companies are expected to post their worst sales decline in nearly six years in the second quarter, in part due to the strong dollar that reduces the value of U.S. companies' overseas income.

Shares in housing companies were a bright spot Wednesday, with the PHLX housing sector index up 1.7 percent after data showed existing home sales rose to their highest level in nearly 8½ years in June. Lennar (LEN) gained 2.3 percent to $53.19.

After the closing bell, SanDisk (SNDK) shares jumped 6.5 percent to $57.72 after the data storage products maker posted quarterly results.

NYSE decliners outnumbered advancers 1,791 to 1,283, for a 1.40-to-1 ratio; on the Nasdaq, 1,437 issues fell and 1,339 advanced for a 1.07-to-1 ratio favoring decliners.

The S&P 500 posted 34 new 52-week highs and 41 lows; the Nasdaq recorded 102 new highs and 140 lows.

About 6.8 billion shares traded on U.S. exchanges, slightly above the average volume so far this month, according to BATS Global Markets.

What to watch Thursday:
  • At 8:30 a.m Eastern time, the Labor Department reports weekly jobless claims, and the Federal Reserve Bank of Chicago releases its national activity index for June.
  • The Conference Board releases leading economic indicators for June at 10 a.m.
Earnings Season
These selected companies are scheduled to release quarterly financial results:
  • 3M (MMM)
  • (AMZN)
  • AT&T (T)
  • Bristol-Myers Squibb (BMY)
  • Comcast (CMCSA)(CMCSK)
  • Eli Lilly (LLY)
  • General Motors (GM)
  • McDonald's (MCD)
  • Starbucks (SBUX)
  • Union Pacific (UNP)
  • Visa (V)
Read Full Story

People are Reading