Market Recap: S&P 500 Breaks Losing Streak, Tesla Surges on Strong Earnings
Major Indexes Close Mixed as Earnings Season Heats Up
On Thursday, October 24, 2024, the U.S. stock market ended the day with mixed results as investors digested a flurry of corporate earnings reports and economic data. The S&P 500 (^GSPC) broke its three-day losing streak, closing up 0.21% at 5,809.86 points. The tech-heavy Nasdaq Composite (^IXIC) outperformed, gaining 0.76% to finish at 18,415.49. However, the Dow Jones Industrial Average (^DJI) lagged, falling 0.33% to 42,374.36, weighed down by some disappointing earnings results .
Tesla Leads Market Gains, IBM Disappoints
The day’s standout performer was Tesla (TSLA), which saw its stock price surge by an impressive 21.92% following better-than-expected quarterly profits. The electric vehicle maker surprised analysts by forecasting 20-30% sales growth for the coming year, injecting optimism into the market .
On the flip side, International Business Machines (IBM) saw its shares tumble 6.2% after reporting revenue that fell short of expectations. This disappointing result contributed to the Dow’s underperformance for the day .
Other Notable Stock Movements
Several other stocks made significant moves based on earnings reports and corporate news:
– United Parcel Service (UPS) gained over 5% after reporting better-than-expected Q3 adjusted earnings per share .
– Newmont Corporation (NEM) dropped more than 8% following weaker-than-anticipated Q3 sales .
– Honeywell International (HON) declined by over 4% after reporting Q3 sales below consensus and cutting its full-year sales forecast .
Economic Data Supports Soft Landing Optimism
The day’s economic releases provided a mixed but generally positive picture of the U.S. economy:
– Weekly jobless claims unexpectedly fell by 15,000 to 227,000, signaling continued strength in the labor market .
– The October S&P manufacturing PMI rose to 47.8, surpassing expectations and indicating a potential stabilization in the manufacturing sector .
– September new home sales increased by 4.1% month-over-month to a 16-month high of 738,000, exceeding forecasts and suggesting resilience in the housing market .
These data points have bolstered optimism for a “soft landing” scenario, where the Federal Reserve manages to curb inflation without triggering a recession.
Treasury Yields and Market Sentiment
The 10-year Treasury yield eased slightly, down 2.6 basis points to 4.220%. This modest decline in yields provided some support for equities, particularly growth stocks that are sensitive to interest rate movements .
Earnings Season in Full Swing
As the Q3 earnings season progresses, investor focus remains on corporate performance. So far, 76% of S&P 500 companies that have reported have surpassed earnings estimates. With approximately 20% of S&P 500 companies set to report in the coming days, market volatility may persist as investors react to these results .
Looking Ahead: Key Events to Watch
Investors should keep an eye on several upcoming events that could impact market direction:
1. Continued Q3 earnings releases from major companies.
2. The European Central Bank’s monetary policy decision, expected on October 26.
3. The advance estimate of U.S. Q3 GDP, scheduled for release on October 26.
4. The Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge, due on October 27.
Conclusion
As the week draws to a close, the market remains focused on earnings reports and economic indicators. The mixed performance across major indexes reflects the complex interplay of corporate results, economic data, and broader market sentiment. With key economic releases and central bank decisions on the horizon, investors will be closely monitoring these events for clues about the future direction of monetary policy and economic growth.
While optimism about a soft landing persists, uncertainties surrounding the upcoming U.S. election and potential shifts in Federal Reserve policy continue to influence market dynamics. As always, investors are advised to maintain a diversified portfolio and stay informed about both company-specific news and macroeconomic trends in this evolving market environment.
