Major stock indexes fall ahead of big tech companies’ earnings announcements

Biggest changes in the S&P 500 index on Tuesday

9 hours ago

Rejectors

• United Parcel Service UPS shares plunged 12.1%, the biggest loser among the S&P 500 stocks, after the company reported weaker-than-expected second-quarter sales and profits. Weak freight demand and pricing issues across the shipping sector contributed to the quarter’s slump. UPS also lowered its full-year revenue and operating margin forecasts, citing the impact of lower-margin shipments from new e-commerce customers.
• of stocks Packer Shares of PCAR (PCAR), a designer and manufacturer of commercial trucks, fell 11.0% after second-quarter profits fell compared to the same period a year ago and fell short of analysts’ expectations. Inflationary pressures and soft freight markets, along with rising capital spending, weighed on PCAR’s performance in the quarter, despite the company’s efforts to expand its portfolio with zero-emission vehicles.
• A.O. Smith Shares in water heater and boiler manufacturer AOS fell 9.4% after the company reported quarterly earnings. Revenue beat expectations and earnings per share (EPS) was in line with expectations, but a weak real estate market and high steel prices weighed on results.

The Advancer

• Pentair Shares of water treatment company Pentair (PNR) rose 9.0%, the best performer in the S&P 500 index on Tuesday, after the company reported second-quarter net sales and EPS that beat analysts’ expectations. The company also raised its third-quarter guidance and predicted that margin expansion will be stronger than previously expected as it focuses on operational efficiencies amid a tough macroeconomic environment.
• Financial Indicators and Analytics Providers Shares MSCI MSCI shares surged 7.9% after the company reported better-than-expected second-quarter sales and profits, boosted by higher subscription revenue and helping the market-cap-weighted index post strong gains.

• Sherwin Williams (SHW) shares also benefited from a strong earnings report, rising 6.9% after the paint distributor reported its latest quarterly results. Revenue fell slightly short of expectations, but adjusted EPS beat expectations, as an increase in the housing market offset weaker industrial demand. Sherwin-Williams also raised its full-year profit outlook.

–Michael Bromberg

NXP shares fall on weak guidance

11 hours 57 minutes ago

Shares of Netherlands-based chipmaker NXP Semiconductors (NXPI) fell sharply on Tuesday after the company issued a weaker-than-expected current quarter outlook, citing slowing spending by automotive customers and rising geopolitical risks.

NXP shares have been fluctuating within a rising wedge for the past 12 months, a chart pattern that typically occurs after an uptrend and signals a potential reversal in the security’s price.

Going forward, investors should monitor the $248 level, where the price is likely to find support from the lower trendline of the ascending wedge.

The company’s shares fell 8.5% to $259.71 in recent trading, making them one of the biggest fallers in the S&P 500 and Nasdaq Composite indexes.

Read the full technical analysis here.

–Timothy Smith

Spotify soars on strong revenue

13 hours 38 minutes ago

Shares of Spotify (SPOT) soared on Tuesday after the streaming audio company reported quarterly profits that beat analysts’ expectations.

The company also provided third-quarter revenue guidance that was in line with market expectations.

The growth was largely due to an increase in Spotify’s Premium subscriber base, which grew 12% year-over-year to 246 million, and comes as the service increased its fees this month.

Spotify shares rose 11% in recent trading, hitting their highest price since the beginning of 2021.

–Andrew Kessel

Interest in small cap stocks continues to grow

14 hours 46 minutes ago

The Russell 2000 continued to rise on Tuesday, outperforming the gains of the major stock indexes.

The morning trading comes on the back of growing interest in small-cap stocks. DataTrek Research said in a Monday note that searches for “IWM” (iShares Russell 2000 exchange-traded fund) recently surged to their highest level in several years, based on Google Trends.

The index itself has also been rallying recently, outperforming the S&P 500 over the past month and posting its best performance against the Nasdaq 100 over the past two weeks since 2002, according to research by Goldman Sachs.

Some of the recent stock rally can be attributed to investor confidence that interest rate cuts are on the way, which could benefit smaller companies that tend to have more debt than larger ones. But if second-quarter earnings point to a weaker second half, that could dampen momentum for small and mid-cap stocks, especially if larger companies perform better.

DataTrek believes small-cap stocks will continue to perform well. “When interest and capital is concentrated across the market, it’s hard to completely dismiss it as a passing fad,” the firm said in a note. “While U.S. small-cap stocks will undoubtedly be volatile in the coming months, we believe they will continue to perform well through the remainder of the third quarter.”

–David Marino Nachison

GE Aerospace soars on strong results, higher guidance

16 hours 8 minutes ago

GE Aerospace shares surged at the start of trading on Tuesday after the company reported better-than-expected second-quarter results on a surge in orders.

The aerospace parts maker saw sales increase 4 percent to $9.1 billion and net income rise to $1.4 billion.

The company now expects full-year operating profit of $6.5 billion to $6.8 billion, up from the previous range of $6.2 billion to $6.6 billion. Earnings per share are now expected to be in the range of $3.95 to $4.20, up from a range of $3.80 to $4.05.

Analysts say GE Aerospace could be well positioned to benefit from growth in the aerospace industry, and its breadth of products and customers could help it weather production hurdles experienced by a single company like Boeing (BA).

Two other units of the former General Electric Co., GE Burnova (GEV) and GE Healthcare (GEHC), will report earnings on Wednesday and next week, respectively.

GE Aerospace shares were up more than 8% in morning trading. The company’s shares have risen nearly 75% since the beginning of the year.

–Aaron McDaid

Spot Ethereum ETF begins trading on Tuesday

16 hours 38 minutes ago

Nine spot Ether (ETH) exchange-traded funds began trading on U.S. exchanges today, and they can be found on Nasdaq, NYSE Arca, and Cboe BZX.

The Spot Ether ETF aims to provide exposure to the price of Ether held by the fund. Ether is the underlying cryptocurrency of the Ethereum network, the second-largest cryptocurrency network measured by market capitalization.

ETF buyers buy shares of the fund that hold Ethereum on behalf of shareholders. When it comes to pricing Ethereum, different spot Ethereum ETFs use different data sources.

More information on the Spot Ethereum ETF launch can be found here.

–Kyle Torpy

UPS shares plummet to four-year low after earnings announcement

17 hours 33 minutes ago

Shares of United Parcel Service (UPS) fell sharply at the open on Tuesday after the delivery giant reported disappointing second-quarter results amid a continued decline in package delivery volumes from highs caused by the pandemic.

Revenue from the company’s shipping business fell just over 1% to $21.8 billion from the same period a year ago, while net income fell 32% to $1.41 billion. Both sales and profits fell short of analysts’ expectations.

UPS now expects full-year revenue of $93 billion, below its previous forecast range of $92 billion to $94.5 billion. The company also lowered its adjusted operating margin forecast to about 9.4%, below its previous forecast of 10% to 10.6%.

UPS shares fell 12%, the biggest decline in the S&P 500, to trade at their lowest in four years.

–Aaron McDaid

Major indexes trending downwards

18 hours 30 minutes ago

Futures tracking the Dow Jones Industrial Average fell 0.1%.

S&P 500 futures also fell 0.1%.

Nasdaq 100 futures fell 0.3%.