Banking

Dow Jones Drops As Caterpillar Weighs; Amazon Dives Below Key Support

Stocks were lower midday Friday, with the Dow Jones Industrial Average down about 120 points. But it was the mildest decline of the major indexes.




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The Nasdaq fell 0.7%, the S&P 500 dipped 0.5% and the Dow Jones industrials edged 0.3% lower in today’s stock market. Small caps tracked by the Russell 2000 were down 0.3%. Volume was lower on both major exchanges vs. the same time Thursday.

For the week, the Nasdaq is on track for a 1.2% drop. The S&P 500 and Dow are headed for much smaller declines of 0.3%-0.4% apiece.

Among exchange traded funds Friday, Innovator IBD 50 (FFTY) slipped 0.8%, while the Nasdaq 100-tracking Invesco QQQ Trust (QQQ) edged 0.6% lower.

Early Friday, the Commerce Department said personal spending rose 1% in June. That beat economist forecasts for a 0.6% increase. The gain follows a revised 0.1% dip in May. Also this morning, the U.S. personal income report for June showed a 0.1% increase. That was much better than a consensus forecast for a 0.7% decline.

Covid-19 Update

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 34964.64 -119.89 -0.34
S&P 500 (0S&P5) 4396.05 -23.10 -0.52
Nasdaq (0NDQC ) 14676.59 -101.68 -0.69
Russell 2000 (IWM) 221.96 -0.56 -0.25
IBD 50 (FFTY) 45.37 -0.38 -0.83
Last Update: 12:02 PM ET 7/30/2021

The U.S. economy continues to recover from the Covid-19 pandemic, which triggered nationwide lockdowns over a year ago. Most states had relaxed restrictions as vaccinations continue to roll out and cases decrease. But mask mandates are returning in some areas as the delta variant spreads.

Cumulative Covid-19 cases worldwide have topped 197 million, with more than 4 million deaths, according to Worldometer. In the U.S., cases are approaching 65 million with nearly 629,000 deaths.

Although the numbers of new cases and deaths in the U.S. have decreased dramatically, cases are back on the rise in some states due to delta.

Earnings News Today

Amazon.com (AMZN), down 7% in heavy trade, was one of the biggest decliners in the Nasdaq 100. Shares gapped down below the 50-day moving average for the first time in nearly two months. Late Thursday, the ecommerce giant reported Q2 adjusted earnings that topped views. But its sales missed, and Amazon issued a disappointing Q3 forecast.

Amazon stock is on pace for its biggest percentage drop since May 1, when it sank 7.6%. It’s down 8.6% this week, on track for its worst week since Feb. 28, when it lost 10.1%.

Pinterest (PINS) dived nearly 19% in huge volume, after the social media company easily beat Q2 targets late Thursday but missed user growth estimates. It ended the quarter with 454 million monthly active users, below expectations for 482 million. Pinterest stock gapped down sharply below the 50-day and 200-day lines.

The stock is on track for the biggest percentage drop since March 16, when it fell 18.7%. If Pinterest closes at its current level, the decline would be slightly bigger.

But Atlassian (TEAM) gapped up and soared more than 24% to a new high in fast turnover. After the close Thursday, the enterprise software maker reported adjusted earnings that topped views and forecast higher-than-expected subscription revenue in fiscal 2022.

Atlassian stock is now 35% extended from a 245.03 buy point cleared last month, according to IBD MarketSmith chart analysis. It was testing the 10-week line before Friday’s move.

Dow Jones Movers

Caterpillar (CAT), down 4%, was the biggest blue chip loser. It’s testing its 200-day line, despite easily beating Q2 forecasts. The company’s construction equipment segment surged 40%, not quite enough to meet analyst projections. CAT stock is about 17% off its early June high.

Boeing (BA), Dow Inc. (DOW) and Chevron (CVX) lost more than 1% each.

Chevron delivered earnings and revenue well above Q2 targets. The oil giant also launched share repurchases aiming for $2 billion to $3 billion per year. Chevron, about 10% off its high, is trying to retake its 50-day line.

But Procter & Gamble (PG), up nearly 3% in heavy trade, was the Dow’s best performer. The consumer products giant announced fiscal Q4 results that beat Wall Street targets on both the top and bottom lines. But it warned of higher costs. P&G stock remains in potential buy range from a 139.20 buy point of a cup with handle.

On Thursday, P&G announced that David Taylor was stepping down as CEO. Chief Operating Officer Jon Moeller will succeed Taylor, who will serve as executive chairman.

Follow Nancy Gondo on Twitter at @IBD_NGondo

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