Dow Reaches Record High But Nasdaq Drops On Earnings News

Dow Reaches Record High But Nasdaq Drops On Earnings News

November 1, 2021

Following the upward trend seen over the past several sessions, stocks turned in a mixed performance during trading on Friday. While the tech-heavy Nasdaq moved to the downside, the Dow reached a new record closing high.

The Dow fluctuated over the course of the session but ended the day up 73.94 points or 0.2 percent at 35,677.02. Meanwhile, the Nasdaq slid 125.50 points or 0.8 percent to 15,090.20 and the S&P 500 edged down 4.88 points or 0.1 percent to 4,544.90 after ending Thursday’s trading at a record closing high.

Despite the mixed performance on the day, the major averages all moved notably higher for the week. The S&P 500 surged up by 1.6 percent, while the Nasdaq and the Dow jumped by 1.3 percent and 1.1 percent, respectively.

The mixed performance on Wall Street came as traders reacted to mixed earnings news from several big-name companies.

A steep drop by Intel (INTC) weighed on the Nasdaq, with the semiconductor giant plunging by 11.7 percent after ending the previous session at its best closing level in three months.

Intel came under pressure after reporting quarter earnings that beat estimates but weaker than expected sales. The company also warned of lower profit margins over the next few years.

Snapchat parent Snap (SNAP) also saw substantial weakness after reporting mixed third quarter results and warning changes to Apple’s iOS privacy rules will lead to slower growth.

On the other hand, a rally by shares of American Express (AXP) contributed to the uptick by the Dow, with the financial services giant jumping by 5.5 percent after reporting third quarter results that exceeded expectations on both the top and bottom lines.

Overall trading activity was somewhat subdued, however, with a lack of major U.S. economic data keeping some traders on the sidelines.

Sector News

Snap led a sell-off in the internet sector, resulting in a 3.2 percent nosedive by the Dow Jones U.S. Internet Index.

Substantial weakness was also visible among airline stocks, as reflected by the 1.9 percent slump by the NYSE Arca Airline Index.

Semiconductor stocks also saw significant weakness amid the steep drop by Intel, with the Philadelphia Semiconductor Index falling by 1.2 percent.

On the other hand, banking stocks showed a strong move to the upside, driving the KBW Bank Index up by 1.5 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Friday. Japan’s Nikkei 225 Index rose by 0.3 percent, while China’s Shanghai Composite Index fell by 0.3 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the French CAC 40 Index advanced by 0.7 percent, the German DAX Index climbed by 0.5 percent and the U.K.’s FTSE 100 Index edged up by 0.2 percent.

In the bond market, treasuries regained ground after trending lower over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.1 basis points to 1.655 percent.

Looking Ahead

Earnings news may continue to drive trading next week, with a slew of big-name companies scheduled to report their quarterly results.

Facebook (FB), General Electric (GE), UPS (UPS), Alphabet (GOOGL), Coca-Cola (KO), General Motors (GM), McDonald’s (MCD), Ford (F), Amazon (AMZN), Apple (APPL), and Exxon Mobil (XOM) are just a few of the companies due to report their results next week.

Next week’s trading may also be impacted by reaction to reports on new home sales, consumer confidence, durable goods orders, and personal income and spending.

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