U.S. Major Averages Heads for First Weekly Loss In Three Months, Businesses Reel Under Global Tech Outage

Barry Adams
19 Jul, 2024
New York City

Market indexes on Wall Street were little changed as investors reacted to a host of geopolitical issues and a fresh batch of earnings. 

The S&P 500 index and the Nasdaq Composite are set to close down for the week for the first time in three months after investor sentiment turned cautious for mega-cap technology stocks.

The largest global information system outage caused by Microsoft technology problems and Crowdstrike information systems problems also weighed on market sentiment. Several large banks, airports, airlines, and industrial companies are facing hours of information system disruptions. 

UPS, FedEX, Union Pacific, Mount Sinai, and Amazon's AWS are some of the leading companies facing information technology disruptions. 

The New York Stock Exchange and Nasdaq confirmed trading systems are operating in normal conditions and are not experiencing any outages. 

Investors have been rotating out of mega-cap stocks and into small-cap and cyclical stocks for the second week in a row, in the hopes that the Federal Reserve is likely to cut rates in September. 

For the week, the Nasdaq Composite is down more than 3% and the S&P 500 index has declined 1.8%, but the Russell 200 index is up 1.3%. 

Investors reacted positively to the latest earnings from American Express, Netflix, SLB, and Intuitive Surgical. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.01% to 5,549.35, and the Nasdaq Composite rose 0.03% to 17,876.08.

The yield on 2-year Treasury notes edged lower to 4.49%, 10-year Treasury notes increased to 4.21%, and 30-year Treasury bonds edged higher to 4.42%.

WTI crude oil decreased $0.92 to $81.99 a barrel, and natural gas prices edged down 3 cents to $2.09 a thermal unit.

Gold decreased by $43.85 to $2,396.74 an ounce, and silver was down 75 cents to $28.93. 

The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 104.33.

 

U.S. Stock Movers 

American Express Company declined 3.4% to $240.14, and the payment processing and financial services company reported weaker-than-expected revenue in the second quarter. 

Revenue increased 9% to $16.3 billion from $14.9 billion, net income advanced 39% to $3.0 billion from $2.2 billion, and diluted earnings per share jumped 44% to $3.49 from $2.89 a year ago. 

The company raised its full-year earnings outlook to between $13.30 and $13.80 from the previous range of between $12.65 and $13.15. 

The membership-based card service provider reiterated its annual revenue growth estimate of between 9% and 11%. 

Comercia declined 11.5% to $49.92 after the financial service company said net interest income was lower than a year ago and added that higher rates are negatively impacting loan volume and increasing costs of deposits. 

Schlumberger NV increased 1.1% to $49.17 after the oil field service provider reported better-than-expected quarterly results. 

Revenue in the second quarter increased 13% to $9.1 billion from $8 billion, net income rose 8% to $1.1 billion from $1.0 billion, and diluted earnings per share advanced 7% to 77 cents from 72 cents a year ago. 

Netflix increased 0.4% to $644.66 after the streaming service provider reported better-than-expected revenue and earnings in the second quarter, but the company's revenue outlook for the third quarter fell short of some analysts' expectations. 

Crowdstrike Holding declined 9.5% to $310.33 after cybersecurity said a product update caused a global outage of information systems that impacted major airlines, banks, and other large corporations.