Stocks Decline Amid IT Outage and Mixed Earnings Reports
On Friday, U.S. stocks continued their downward trajectory, with both the S&P 500 and Nasdaq Composite experiencing losses for the third consecutive session. The decline was exacerbated by a global IT outage that disrupted various sectors, including flight operations and stock exchanges.
Notable Stock Movements
Microsoft saw a decline of 0.6% as a significant worldwide IT outage impacted its operations. The outage, which followed an overnight update from cybersecurity company CrowdStrike, affected Microsoft’s PC operating systems and led to disruptions across multiple platforms. Despite the disruption, CrowdStrike CEO George Kurtz clarified that the issue was not a security incident or cyberattack. The company has identified and isolated the problem and has deployed a fix.
CrowdStrike experienced a sharp drop of 9.2%, reflecting the broader impact of the IT outage. The cybersecurity firm’s update caused considerable disruption, leading to its significant decline in stock value.
Netflix reported second-quarter earnings that exceeded expectations, adding 8.05 million subscribers compared to the 5.89 million added in the same period last year. Despite this positive news, Netflix’s shares fell by 0.7%. The company’s revenue was in line with Wall Street estimates, and it forecasted a 14% increase in third-quarter revenue to $9.7 billion. This forecast, while optimistic, fell slightly below consensus expectations.
Intuitive Surgical reported second-quarter adjusted profits that surpassed analysts’ estimates, with sales reaching $2.01 billion—better than the expected $1.97 billion. The company reported a 17% increase in procedures performed with its da Vinci robotic systems. Shares of Intuitive Surgical surged by 8.7% following the positive earnings report.
PPG Industries saw its second-quarter earnings and revenue decline from the previous year, causing a 3.4% drop in its stock price. The company cited organic sales growth in several business areas, including aerospace and packaging coatings. However, this growth was countered by weakening global automotive builds and subdued industrial production.
Plug Power experienced a notable drop of 14% after announcing a $200 million public share offering. The capital raise led to a significant decrease in the company’s stock value.
American Express reported a stronger-than-expected second-quarter profit and raised its full-year earnings guidance to between $13.30 and $13.80 per share, up from the previous $12.65 to $13.15 range. Despite these positive developments, the stock fell by 3.7%, potentially due to broader market trends and investor sentiment.
SLB reported second-quarter earnings that were higher compared to the previous year, with revenue rising 13% to $9.14 billion. However, per-share earnings of 77 cents missed analysts’ forecasts of 82 cents. The stock gained 3.5% following the earnings release.
Halliburton reported second-quarter revenue that fell short of Wall Street estimates, with revenue rising to $5.83 billion from nearly $5.8 billion a year earlier but missing the expected $5.95 billion. Shares declined by 3.8% in response to the earnings miss.
Arm Holdings saw a rise of 3.7% to $164.15 following an upgrade from Morgan Stanley, which raised its rating to Overweight from Equal Weight and increased the price target to $190 from $107.
Travelers experienced a 7% drop after posting second-quarter revenue that missed estimates. The insurance company reported a rise in catastrophe losses to over $1.5 billion, contributing to the stock’s decline.
Overall, the day’s trading was marked by a mix of earnings reports, market disruptions, and investor reactions to various corporate developments. As the market continues to navigate these challenges, investor sentiment and stock performance will likely remain volatile.