On Thursday, the US benchmark equity indexes painted a mixed picture as investors evaluated the most recent corporate earnings alongside an initial reading of economic growth for the second quarter. The Nasdaq Composite experienced a decline of 0.9%, settling at 17,181.7, while the S&P 500 dropped 0.5% to reach 5,399.2.
In contrast, the Dow Jones Industrial Average managed a slight increase of 0.2%, closing at 39,935.1. Within the sectors, communication services faced the steepest decline, while energy augmented its gains. In a significant development, Edwards Lifesciences ($EW) suffered a notable setback, with shares plummeting 31%, marking the largest drop across the S&P 500.
The company announced late Wednesday that its second-quarter sales fell short of market expectations. Additionally, in a strategic move to enhance its structural heart portfolio, Edwards Lifesciences has secured a deal to acquire JenaValve Technology and has exercised its option to purchase Endotronix. Ford Motor ($F) also faced substantial losses, becoming the second-worst performer on the S&P 500 with an 18% decline.
The automotive giant's second-quarter earnings report, released late Wednesday, disappointed investors amid rising warranty costs and operational expenses. Ford continues to revise its projections, indicating a full-year loss anticipated for its electric vehicle segment. On a brighter note, Honeywell International ($HON) reported second-quarter results that exceeded Wall Street's projections, prompting a revision of its full-year outlook amidst recent acquisition announcements.
However, despite the positive earnings, the company saw its shares drop 5.2%, marking the steepest decline on the Dow. In stark contrast, ServiceNow ($NOW) and Molina Healthcare ($MOH) emerged as the top gainers on the S&P 500, with share prices escalating by 13% and 12%, respectively. This surge followed their releases of second-quarter financial results that surpassed expectations, boosting investor confidence in both firms. IBM ($IBM) also shone brightly on the Dow, exhibiting the highest increase of 4.3% as the company reported a remarkable second-quarter earnings growth, driven by strong momentum in its software division.
This performance propelled consolidated revenues beyond analysts' predictions, showcasing IBM's resilience in a competitive market. In the bond market, the US 10-year yield decreased by 3.9 basis points to 4.25%, whereas the two-year yield witnessed a rise of 1.7 basis points to reach 4.43% on Thursday. In economic news, real gross domestic product (GDP) for the US indicated a 2.8% annual growth rate for the June quarter, as per an advance estimate from the Bureau of Economic Analysis.
This exceeded the Bloomberg consensus, which anticipated a 2% gain. The report pointed to increased consumer spending, coupled with a moderation in inflation during the second quarter. Stifel's commentary indicated that the robust GDP report is likely to mitigate the tone of rhetoric from Federal Reserve officials regarding potential monetary policy adjustments in September. Additionally, US durable goods orders demonstrated an unanticipated decline in June after four consecutive months of increases, primarily impacted by transportation equipment, as reported by government data.
Furthermore, manufacturing activity in the Midwest exhibited a sudden drop into deeper contraction territory this month, signaling a need for close scrutiny of future production strategies. In contrast, weekly applications for unemployment insurance in the US decreased more significantly than market expectations, along with a decline in continuing claims, illustrating a tight labor market.
In commodity news, West Texas Intermediate crude oil rose 0.8%, reaching $78.18 per barrel. Conversely, gold prices experienced a decline of 2.3% to $2,361 per troy ounce, while silver fell 4.7% to $27.93 per ounce, reflecting volatility in precious metals markets. As investors navigate through these mixed signals, the interplay between corporate earnings and macroeconomic indicators will undoubtedly shape market sentiment in the days to come..