Market Brief: July 23, 2020

A daily summary of news, analysis and data shaping the market.
Market Brief
Thursday, July 23, 2020
Tech Leads the Slide. U.S. stocks fell into the red on Thursday afternoon, following a relatively flat morning as investors processed the latest round of second-quarter earnings reports and economic data. The price of gold, meanwhile, settled at a new high. The Dow Jones Industrial Average closed down 354 points, or 1.3%, while the S&P 500 fell 1.2%. Both indexes had hovered near the break-even line until the early afternoon, when technology shares led the market lower. The Nasdaq Composite closed down 2.3%, and the S&P 500 technology sector lost 2.6%.
DJIA 26,652.33 -353.51
S&P 500 3,235.66 -40.36
NASDAQ 10,461.42 -244.71
US 10-Year Note 0.58 -0.02
Dollar Index 94.82 -0.17
Crude Oil 41.05 -0.85
Gold 1,881.70 16.60
Global Dow 2,975.67 -17.62
Powered by Dow Jones Research, FactSet, Eurostat, SIX Financial Information.
Jobless Claims Turn Up for First Time Since March as Reopenings Get Rolled Back
Claims for unemployment insurance rose for the first time since late March, signaling the recovery so far in the U.S. labor market and beyond is sputtering as some states and companies roll back reopenings amid rising Covid-19 infections.

The Labor Department said Thursday that 1.42 million Americans filed for first-time jobless benefits in the week ending July 18 on a seasonally adjusted basis. That’s up from a revised 1.31 million in the prior week, and it’s higher than the 1.3 million economists polled by FactSet had predicted. In recent weeks, what had been a steady decline in claims from a March peak started to stall.

Continue reading ›
Ann Taylor Parent Ascena Files for Bankruptcy as Pandemic Crushes Troubled Retailer
Crushed by the effects of the coronavirus pandemic on its already troubled business, Ascena Retail Group, parent of the Ann Taylor and Loft retail chains, filed for voluntary Chapter 11 bankruptcy on Thursday, with a restructuring agreement supported by more than 68% of its secured term lenders.

The Mahwah, N.J.-based company said it expects to reduce debt by about $1 billion in its pre-arranged restructuring, providing increased financial flexibility to become profitable. “The meaningful progress we have made driving sustainable growth, improving our operating margins and strengthening our financial foundation has been severely disrupted by the COVID-19 pandemic,” Carrie Teffner, the company’s interim executive chair, said in a statement.

Continue reading ›
A Trio of Airlines Report Results. Expect the the Air Travel Recovery to Be Uneven.
A trio of airlines reported second-quarter results before the market opened on Thursday. American Airlines Group, Southwest Airlines, and Alaska Air Group collectively racked up billions of dollars in losses—as expected. And they indicated that the recovery in air travel will continue its uneven pace—likely causing more turbulence in the stocks.

American Airlines reported an adjusted loss of $7.82 a share, narrowly beating estimates for a loss of $7.84. Revenue in the quarter fell by 86% to $1.6 billion, beating estimates for $1.4 billion. Southwest, for its part, slightly beat earnings estimates. Revenue trends weakened in July, Southwest said, and the airline said it was re-evaluating its August and September schedules. Lastly, Alaska reported an adjusted loss of $3.54 a share, smaller than the consensus estimate for a $3.78 loss. Revenue declined 82% to $421 million, beating forecasts for $335 million.

Continue reading ›
Spirit Airlines’ Loss Is Worse Than Expected and Demand Trends Remain Choppy
Leisure travel may be slowly coming back, but Spirit Airlines’ earnings report illustrates how bumpy the recovery has become.

Spirit reported an adjusted pretax loss of $364 million in the quarter, resulting in a loss of $3.59 a share, which was worse than the consensus estimate for an adjusted loss of $2.77 a share. Revenue collapsed by 86% to $138.5 million.

Continue reading ›
Tesla’s Earnings Smashed Forecasts Again. Hello, S&P 500.
Elon Musk has done it again, beating Wall Street’s expectations for Tesla’s earnings significantly for the fourth quarter in a row.

The electric vehicle company late Wednesday reported adjusted earnings per share of $2.18, and a profit under generally accepted accounting principles, or GAAP, of 50 cents a share. Analysts were looking for results near the break-even line. It’s hard to be more precise because earnings estimates on Tesla have been all over the place for the pandemic-affected second quarter.

Continue reading ›
Twitter Reports Strong User Growth but Revenue Misses Estimates. The Stock Is Up.
Twitter stock popped on Thursday after the social media giant beat expectations for user growth, though earnings and revenue came up short of expectations.

The company said monetizable daily active users, or MDAUs, grew to 186 million during the quarter, topping consensus estimates that called for 172 million, according to FactSet.

Continue reading ›
Chipotle Stock Slips After Earnings Because a Beat Wasn’t Good Enough
Chipotle Mexican Grill shares fell on Thursday, despite better-than-expected second-quarter earnings, making the burrito seller the latest highflying stock to fall after posting results.

Chipotle late Wednesday said it earned 29 cents a share, nearly $3 less on a per-share basis than in a year earlier. However, on an adjusted basis, earnings per share were 40 cents, a nickel ahead of the average analyst estimate, according to FactSet. Revenue fell 4.8% to $1.4 billion, above the $1.33 billion consensus estimate.

Continue reading ›
Nvidia Is Reported to Be Interested in Buying SoftBank’s Arm Unit
There is a new twist to the unfolding saga of what SoftBank Group might do with Arm Holdings, the U.K.-based chip design house it bought for $32 billion in 2016.

Given that so many chip makers license Arm’s microprocessor designs, the conventional wisdom has been that an IPO was more likely than an outright sale to a chip company. But on Wednesday, Bloomberg reported that Nvidia in recent weeks approached SoftBank about potentially buying Arm outright.

Continue reading ›
Kimberly-Clark’s Earnings Were So Good It’s Buying Back Stock Again
Kimberly-Clark shares are cleaning up Thursday, after the household products maker’s second quarter was much better than expected. It also reinstated guidance and recommitted to repurchasing shares, signaling the company thinks the strength will continue even after the threat of Covid-19 fades.

Kimberly-Clark said it earned $681 million, or $1.99 a share. On an adjusted basis, earnings per share were $2.20, ahead of the $1.80 analysts were predicting. Revenue of $4.61 billion also came in ahead of the $4.46 billion consensus estimate.

Continue reading ›
PulteGroup Stock Jumps After Earnings Show a Spike in New-Home Demand
PulteGroup‘s earnings reported Thursday morning help demonstrate why builder confidence is rebounding to prepandemic levels.

The home builder reported earnings per share of $1.29. Adjusted earnings per share was $1.15, beating the analyst consensus of 87 cents, according to FactSet. The company reported 6,522 net new orders. While that is down about 4% from the same quarter in 2019, it is much better than what Wall Street saw coming. Analysts polled by FactSet expected new orders to drop to 4,999, which would have represented a 26.4% drop from a year earlier.

Continue reading ›
Dow Jones Contact Us
| Privacy Policy
| Cookie Policy
4300 Route 1 North, South Brunswick, NJ 08852
Copyright ©
2020 Dow Jones & Company, Inc. All Rights Reserved. Not for redistribution.
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market or economic conditions.

Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance.