Thursday's Market Summary: Stocks End Lower Amidst Weak Earnings Reports

Strategic Insights -

Stocks began the session mixed on the heels of weak earnings reports from Caterpillar and 3M, with the Nasdaq managing to spend most of the day in positive territory before joining the other averages in negative territory by mid-afternoon. The selling picked up momentum towards late afternoon, and by day's end, each of the averages were lower by more than 0.4%, with the Dow losing nearly 0.7%. The session was marked by earnings reports from various companies, with some notable names rising while others fell.

Key Takeaways:

  • Caterpillar (CAT) cut its yearly guidance during its earnings report, citing a "relatively stagnant" global economy, and dropped $2.86 to $76.90.
  • General Motors (GM) reported earnings per share above analyst expectations and finished the session up 3.96% to $31.50.
  • Cigna (CI) rose $3.29, or 2.18%, to $154.36 after the Wall Street Journal reported that Anthem (ANTM) is nearing a deal to acquire the company for roughly $187 billion.
  • Numerous IT security companies, including FireEye (FEYE) and Palo Alto Networks (PANW), advanced after earnings reports from security firms Fortinet (FTNT) and F5 Networks (FFIV) beat on both top and bottom lines.
  • Hertz (HTZ) declined 8.53% to $16.45 following a downgrade to Underweight at Morgan Stanley, citing increased competition from Uber and similar mobility services.
  • McDonald's (MCD) edged down 0.52% to $97.10 after noting that Q2 global comparable sales fell 0.7% for the quarter, including a 2% decline in U.S. same-store sales.
  • The Dow fell 0.67% to 17,731.92, the Nasdaq lost 0.49% to 5,146.41, and the S&P 500 declined 0.57% to 2,102.15.

Statistics:

  • Initial jobless claims fell to 255,000 in the week ended July 18, below the 278,000 first-time claims that were expected.
  • The Leading Economic Indicators advanced 0.6% in June, exceeding expectations for a 0.3% increase.
  • The Shanghai Composite index advanced for a sixth straight session, adding another 2.4%.
  • Cigna's market capitalization was over $48 billion, representing a 45% equity, 55% cash split with Anthem.
  • Hertz's market capitalization was $16.45, representing an 8.53% decline.
  • McDonald's Q2 global comparable sales fell 0.7% for the quarter, including a 2% decline in U.S. same-store sales.

Sources:

  • TheFlyOnTheWall.com via COMTEX
  • Wall Street Journal
  • CNBC
  • Morgan Stanley
  • Fortinet
  • F5 Networks
  • FireEye
  • Palo Alto Networks
  • General Motors
  • Caterpillar
  • Cigna
  • Anthem
  • Hertz
  • McDonald's