Market Wrap for Friday, July 25: Earnings Misses Take Equities Lower
Top and bottom line misses on several headliners caused a concentrated selloff that took major exchanges lower.
- The Dow Jones Industrial Average plummeted 123.2 points, or 0.72 percent to close at 16,961.
- The S&P 500 dropped 9.6 points, or 0.48 percent to close at 1,978.
- The Nasdaq gave up 22.5 points, or 0.5 percent to close at 4,450.
Friday was filled with a barrage of analyst commentary on the week’s earnings reports, most notably Amazon (NASDAQ: AMZN) and Pandora (NASDAQ: P). Amazon saw its rating cut B Riley and Raymond James while five maintained previous calls. No major analysts changed their ratings of Pandora, but indicated that a second half pick up is likely.
Moving opposite of technology, basic materials shares rose 0.19 percent in trading on Friday. Top gainers in the sector included DRDGOLD (NYSE: DRD), up seven percent, and LyondellBasell Industries NV (NYSE: LYB), up 4.3 percent.
Acacia Research (NASDAQ: ACTG) shares shot up 16.8 percent to $17.49 after the company reported upbeat Q2 results and approved a $0.125 per share quarterly dividend.
Shares of Qlik Technologies (NASDAQ: QLIK) got a boost, shooting up 14.7 percent to $26.83 after the company reported better-than-expected quarterly results.
The Royal Bank of Scotland Group plc (NYSE: RBS) shares were also up, gaining 10.7 percent to $12.38 on strong earnings report.
Shares of Pandora Media (NYSE: P) were down 10.34 percent to $25.75 after the company announced slower than expected growth metrics. Pandora’s earnings beat the official analyst estimate by $0.01 per share at $0.04 per share. The company also raised its full-year forecast.
Amazon.com (NASDAQ: AMZN) shares tumbled 9.7 percent to $324.01 after the company reported a wider-than-expected loss for the second quarter. For the third quarter, Amazon projected sales of $19.7 billion to $21.5 billion. Analysts at B Riley downgraded Amazon from Buy to Neutral and lowered the target price from $425 to $350.
Informatica (NASDAQ: INFA) was down, falling 12.3 percent to $30.65 after the company reported quarterly results and lowered its FY14 earnings forecast. Baird downgraded Informatica from Outperform to Neutral and lowered the price target from $45.00 to $36.00.
Asian markets finished trade on a high note this week. The Shanghai index rose 1.02 percent with Hong Kong’s Hang Seng up 0.31 percent. Japan’s Nikkei picked up 1.13 percent on the session.
Europe sold off sharply. The Euro Stoxx index, which tracks 50 blue chips sold off 1.4 percent, London’s FTSE dropped 0.44 percent and France’s CAC plummeted 1.82 percent.
The sharp downtick in equities around 11 am was coupled with a sharp spike higher in both gold and oil futures. Crude futures made a massive move from $101 to $102.50. The commodity was last trading at $101.95.
Gold futures make a similar jump from $1,303.80 to $1,308.90, but maintained the level and was last just $0.90 off the high.
The Powershares ETF (NYSE: UUP) which tracks the value of the US dollar versus a basket of foreign currencies, rose a twentieth of a percent to close out a strong week. The ETF was last trading at $21.62, a 0.65 percent weekly gain.
Yields dropped Friday as investors transitioned from equity to debt. The iShares ETF (NYSE: TLT), which tracks the performance of 20 plus year government bonds, was up 1.18.
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