Text size
After two days of gains, investors are preparing for declines tomorrow.
Spencer Platt/Getty Images
U.S. stock futures were down Wednesday evening as markets appeared to reverse course following two days of consecutive gains for the major indexes.
T
he indexes rose Tuesday on an especially strong day for tech stocks. The S&P 500 gained 0.6% and the Dow Jones Industrial Average finished up 0.2%, while the tech-heavy Nasdaq Composite added 1.6%.
Netflix
(ticker:
NFLX
), which reported earnings on Tuesday afternoon that co-chief executive Reed Hastings deemed as “less bad results,” was one of the leaders, rising 7.4%.
Tesla
(
TSLA
) became the latest major company to report earnings on Wednesday afternoon. Revenues declined from the first quarter, largely due to zero-COVID lockdowns in China that affected
Tesla
’s
Shanghai assembly plant and reduced sales, but the electric-vehicle maker still beat analyst expectations. The company, whose market capitalization of about $770 billion comprises roughly 4% of the Nasdaq’s total market capitalization of $19.4 trillion, registered $2.3 billion in second-quarter profits, or $2.27 per share, which surpassed expectations for $1.9 billion.
The stock spiked in the immediate aftermath of its results before its gains leveled. Tesla was up about 1% in after-hours trading.
At 6:30 p.m. Eastern time, futures for the S&P 500, Dow Jones Industrial Average, and Nasdaq were down 0.3%, 0.2%, and 0.3%, respectively.
The Nasdaq is now almost 12% above its 2022 low, which came in mid-June. The S&P and the Dow dipped to their lowest points this year around the same time, but haven’t rebounded as much since: the S&P is 8% above that low, while the Dow is up nearly 7% from its own mark.
But this week’s earnings-season rally has come amid a general backdrop of poor investor sentiment.
Bank of America
’s
July Global Fund Manager Survey revealed “dire levels of investor pessimism,” Michael Hartnett and Myung-Jee Jung, investment strategists at the bank, wrote this week.
“Expectations for global growth & profits [are at] all-time lows, cash levels [are] highest since “9/11”, equity allocation lowest since Lehman,” they wrote, listing off key takeaways from the survey.
Carnival
(
CCL
) and
UAL
) were losing the most ground in after-hours trading Tuesday, down 8.6% and 7%, respectively. Carnival announced a public offering of $1 billion of shares of common stock, with
GS
) conducting the underwriting. Meanwhile, United’s earnings of $1.43 per share missed expectations for $1.85 per share, and the airline also cut plans to grow capacity in 2023, citing higher fuel prices and operational issues.
Alcoa
(
AA
), up 6.4%;
Public Service Enterprise Group
(
PEG
), up 4.1%; and
CSX
(
CSX
), which rose 4.1%, were all gaining Wednesday evening. Investors reacted favorably to
Alcoa
’s
second-quarter earnings, which showed that the aluminum producer earned $549 million in its most recent quarter, compared with $309 million a year ago.
Danaher
(
DHR
),
AT&T
(T),
PM
),
BX
),
DPZ
), and
AAL
), which was down 1.9% in after-hours trading following the release of United’s results, report their earnings before the bell on Wednesday. Results from
Snap
(
SNAP
) and
COF
) arrive after the market closes in the afternoon.
Weekly jobless claims also go live Thursday at 8:30 a.m., with 20 economists surveyed by The Wall Street Journal expecting 240,000 claims, which would be 4,000 fewer than the week before.
Write to editors@barrons.com