Stocks opened sharply lower on the heels of disappointing guidance from Nvidia (NVDA) and Applied Materials (AMAT), which pushed the Nasdaq deep into negative territory and brought the rest of the market with it. The averages saw their lows a short time after the open and then rallied across the flatline. The Nasdaq continues to lag, although it is off its lows, while the Dow and S&P have fared a bit better although neither is pointing to much bullish conviction.
ECONOMIC EVENTS: In the U.S., industrial production rose 0.1% in October, while capacity use was 78.4%.
COMPANY NEWS: Shares of Nvidia are sharply lower, falling over 18% after the company's January quarter guidance was much weaker than expected. Some analysts have defended Nvidia, stating it was "kitchen sinking the quarter," though B. Riley FBR analyst Craig Ellis downgraded the stock to Neutral and Goldman Sachs analyst Toshiya Hari removed Nvidia from his firm's Conviction List.
Adding more pressure to the semiconductor space is Applied Materials, which is down 1% after its own fiscal first quarter guidance came in below expectations. Similar to peers, Applied expects first half of 2019 semiconductor revenue to be higher than the second half of 2018, but is incrementally cautious on calling when the bottom will occur, noted JPMorgan analyst Harlan Sur.
Shares of Sonos (SONO) are reacting more positively to its own report, rising 9% after the speaker maker reported better than expected revenues and losses that were not as steep as the consensus forecast in its fiscal fourth quarter.
MAJOR MOVERS: Among the noteworthy gainers was PG&E (PCG), which surged 35% after Bloomberg reported that a California Public Utilities Commission official told investors on a conference call that the CPUC does not want the company to go into bankruptcy.
Also higher was Trinity Industries (TRN), which gained 3% after the company announced an accelerated share repurchase program and raised its fiscal 2019 earnings per share guidance.
Among the notable losers was Acadia (ACHC), which slid 19% after CNBC's David Faber reported that the company's sale process has been stalled and does "not look particularly promising."
Also lower were Nordstrom (JWN) and Williams-Sonoma (WSM), which fell a respective 14% and 12% after reporting quarterly results.
INDEXES: Near midday, the Dow was up 1.2 to 25,290.47, the Nasdaq was down 68.56, or 0.94%, to 7,190.47, and the S&P 500 was down 7.88, or 0.29%, to 2,722.32.
Nvidia
-36.15 (-17.84%)
Applied Materials
-0.64 (-1.83%)
Sonos
+1.07 (+7.57%)
PG&E
+6.16 (+34.67%)
Trinity Industries
+0.87 (+4.00%)
Acadia Healthcare
-7.22 (-19.08%)
Nordstrom
-8.14 (-13.80%)
Williams-Sonoma
-7.34 (-12.11%)