Stocks opened deep in negative territory on the heels of mixed earnings reports from tech giants Amazon (AMZN) and Alphabet (GOOGL), as both posted better than expected profits but lower than expected revenues. The losses have wiped out almost all the gains from yesterday’s massive rally and put the S&P into correction territory with losses of more than 10% from its all-time high. The Nasdaq, meanwhile, is in the midst of its worst monthly performance since 2008.
ECONOMIC EVENTS: In the U.S., GDP grew at a 3.5% rate in Q3, beating most estimates. The final October print from the University of Michigan consumer sentiment survey was down 1.5 points from last month at 98.6. That was also below the 99.0 preliminary October reading.
COMPANY NEWS: Shares of Amazon are sliding 8% after the company's revenue and unit growth in Q3 came in modestly below expectations and Q4 guidance disappointed with 15% revenue growth at the midpoint. While many Wall Street analysts trimmed their Amazon targets following the report, a few actually raised their targets and none downgraded the stock.
Class A shares of Alphabet are also down 3% after the parent of Google reported Q3 revenue that missed expectations by 1%. JPMorgan analyst Doug Anmuth was among the many Street analysts defending the shares following last night's Q3 results, noting that while revenue came in a little light, overall results continue to show that the company's investments in the business are driving 20%-plus growth.
In contrast to the disappointments from Amazon and Alphabet, Intel (INTC) posted a "beat and raise" report, calling out stronger than expected customer demand across its PC and data-centric businesses for its strong third quarter. Shares of the chipmaker are a rare bright spot on the Nasdaq, rising nearly 4%.
MAJOR MOVERS: Among the noteworthy gainers was Mellanox (MLNX), which rose 17% after CNBC reported that the company had hired a financial adviser to help it seek a sale. Also higher were National Instruments (NATI) and Expedia (EXPE), which gained a respective 13% and 2% after reporting quarterly results.
Among the notable losers was Snap (SNAP), which fell 13% after the company reported quarterly results, noting that it assumes daily active users will decline sequentially in the fourth quarter. Also lower after reporting quarterly results were Flex (FLEX) and Western Digital (WDC), which dropped 30% and 17%, respectively.
INDEXES: Near midday, the Dow was down 347.49, or 1.39%, to 24,637.06, the Nasdaq was down 151.18, or 2.07%, to 7,167.15, and the S&P 500 was down 47.06, or 1.74%, to 2,658.51.
Amazon.com
-138.16 (-7.76%)
Alphabet
-34.96 (-3.16%)
Intel
+1.77 (+3.99%)
Bought by NVDA
+11.75 (+16.17%)
Snap
-0.995 (-14.19%)
National Instruments
+5.67 (+13.21%)
Expedia
+2.23 (+1.90%)
Flex
-3.35 (-30.71%)
Western Digital
-9.45 (-17.50%)
Alphabet
-34.48 (-3.14%)