Tesla and Netflix Worries Drive Averages Lower, Wheat Rallies 3rd Day

Barry Adams
20 Jul, 2023
New York City

Stocks edged lower on Wall Street after Tesla and Netflix earnings missed investors' expectations and Treasury yields advanced after inflation worries reemerged. 

The yields of 2-year, 10-year and 30-year Treasury securities rose higher on the worries of the reigniting of food inflation after Russia canceled Black Sea deal yesterday.

Wheat price advanced for the third day in a row and jumped to $7.30 a bushel, following a9% jump in yesterday's session, the largest single-day gain since 2012. 

Initial jobless claims declined 9,000 to 228,000 in the last week, the lowest level in two months, the Department of Labor reported Thursday. 

The unexpected decline in weekly claims highlighted ongoing tough labor market conditions in several sectors including leisure and entertainment, food services and warehouse and transportation. 

The four-week moving averages eased to 237,500, the lowest level in six weeks, indicating a tight labor market. 

 

U.S. Indexes & Yields 

The S&P 500 index traded lower 0.02% to 4,563.17 and the Nasdaq Composite futures edged down 0.7% to 14,308.76. 

The yield on 2-year Treasury notes decreased to 4.77%, 10-year Treasury notes inched lower to 3.76% and 30-year Treasury bonds edged down to 3.86%. 

Crude oil increased $0.82 to $76.17 a barrel and natural gas prices increased 12 cents to $2.73 a thermal unit. 

 

Stock Movers 

Tesla Inc declined 5.7% to $274.92 after the electric vehicle maker reported quarterly results and executives indicated lower sales volume in the current quarter because of plant maintenance. 

Total revenue jumped 47% to $24.9 billion from $16.9 billion and net income attributable to common stockholders increased 20% to $2.7 billion from $2.3 billion and diluted earnings per share rose 91 cents from 76 cents a year ago. 

Quarterly revenue and earnings were ahead of market expectations and operating margin fell to a low of at least five quarters to 9.6% from the high of 17.2% in third quarter of 2022 on higher discounting.  

Free cash flow jumped 62% to $1.0 billion from $621 million a year ago. 

Las Vegas Sands Corp dropped 3% to $57.85 after the casino and resort company reported mixed quarterly results. 

Revenue in the quarter soared to $2.5 billion from $1.0 billion and net income swung to a profit of $368 million from a loss of $414 million and diluted earnings per share increased to 41 cents from (38) cents. 

The company reinstated its quarterly cash dividend of 20 cents a share. 

Netflix Inc declined 8.3% to $437.95 after the video content streaming company reported weak revenue growth in the second quarter.  

Revenue rose 2.7% to $8.2 billion from $7.9 billion and net income was nearly unchanged at $1.49 billion and diluted earnings per share rose to $3.29 from $3.20 a year ago. 

Free cash flow jumped to $1.3 billion from $13 million and global streaming paid members increased 8% to 238.39 million from 220. 67 a year ago.