Stocks: Dow drops more than 100 points as profit fears grow

Stocks fell on Thursday morning as Wall Street assessed a mixed bag of company earnings, with Tesla’s poor results weighing on technology companies.

The Dow Jones Industrial Average fell 197 points or around 0.6%. The S&P 500 and Nasdaq Composite fell 0.6% and 0.5%, respectively.

Concerns over profit margin erosion weighed on Tesla shares. The electric vehicle maker reported a more than 20% drop in both net income and GAAP earnings year over year. During this time, the company reduced the pricing of some of its vehicles. The stock dropped by more than 7%.

The drop dragged down the technology sector. Firms like Netflix, Nvidia, and Microsoft are all down somewhat. Falling Seagate Technology shares added to the losses. The stock of computer storage fell 4% after missing projections and providing disappointing guidance, citing sluggish demand.

Disappointing numbers from AT&T and American Express did little to assuage market anxiety. The payments company lost 5% as earnings per share fell short of expectations. Such an occurrence provides another peek at the health of the American consumer.

Stock indicators hint at a recession: Sales decrease more than predicted

According to FactSet, approximately 16% of S&P 500 businesses have reported earnings so far this season. Brokers estimated approximately 62% exceeding. This holiday season, many on Wall Street are expecting earnings to fall. However, a widespread lack of profit expectations has begun to worry some investors.

William Northey, senior investment director at US Bank Wealth Management, shared his expectations. Investors were focused primarily on these quarterly results. However, the reporting businesses have not influenced the broader market.

Thus far, earnings releases appeared to be uneven. Individual equities react to specific company results in forecasts rather than overall index directionality.

A new wave of economic statistics appeared to indicate a declining economy. Besides, it exposes the possibility of a considerably larger downturn than anticipated. The Philadelphia Fed manufacturing index fell more than predicted. This way, it reached its lowest level since May 2020. Meanwhile, unemployment claims increased from the prior week.

On Thursday, central bank speakers will also make economic remarks. Some famous names are Federal Reserve Governor Christopher Waller and Atlanta Federal Reserve President Raphael Bostic. Among them, Cleveland Federal Reserve President Loretta will also speak at the confession.

The stock market had a mixed day on Wednesday. The S&P 500 finished just below its flatline, while the Nasdaq Composite finished marginally higher. The Dow finished 0.2% lower.