The latest trading session saw US benchmark equity indexes close mixed as market participants digested recent corporate earnings results alongside an initial reading of second-quarter economic growth. The Nasdaq Composite experienced a decline of 0.9%, closing at 17,181.7, while the S&P 500 fell by 0.5%, ending at 5,399.2.
Conversely, the Dow Jones Industrial Average managed a slight gain, rising 0.2% to finish at 39,935.1. Among various sectors, communication services suffered the most significant losses, whereas the energy sector led the gains. In enterprise news, shares of Edwards Lifesciences ($EW) faced a dramatic 31% drop, marking the steepest decline on the S&P 500.
This significant downturn came after the company reported second-quarter sales that fell below market expectations late Wednesday. Similarly, Ford Motor ($F) found itself as the second-worst performer on the S&P 500, tumbling 18%. The automaker's earnings report revealed second-quarter results that were below market estimates, due in part to rising warranty costs and expenses.
Ford continues to forecast a full-year loss within its electric vehicle segment, adding to investor concern. On a more positive note, Honeywell International ($HON) exceeded Wall Street's forecasts with its second-quarter results, also revising its full-year outlook following several recently announced acquisitions.
However, despite the favorable results, the company’s shares still closed 5.2% lower, reflecting the steepest decline on the Dow. In contrasting performances, ServiceNow ($NOW) and Molina Healthcare ($MOH) saw significant gains, with both companies’ shares soaring 13% each, positioning them as the top performers on the S&P 500 after reporting better-than-expected financial outcomes for the second quarter. Meanwhile, IBM ($IBM) stood out as the highest gainer on the Dow, climbing 4.3%.
The tech giant reported second-quarter earnings that not only exceeded expectations but also reflected a year-over-year increase, largely driven by momentum in its software division, resulting in revenue that surpassed Wall Street's estimates. In the backdrop of corporate earnings, the US 10-year treasury yield witnessed a decline of 3.5 basis points, settling at 4.25%, while the two-year rate rose by 2.3 basis points to 4.44%. Economically, the Bureau of Economic Analysis reported that the US real gross domestic product (GDP) rose at an annual rate of 2.8% in the June quarter.
This figure was notably above the market consensus, which had estimated a gain of 2%. The report also highlighted a boost in consumer spending alongside a cooling of inflation during the same quarter. Stifel commented on the GDP report, suggesting that it would likely temper the tone of discussions among Federal Reserve officials regarding the possibility of a monetary policy move in September. Amid this economic backdrop, US durable goods orders surprisingly fell in June after experiencing four consecutive months of gains.
This decline was influenced heavily by a reduction in transportation equipment orders, per government data. Additionally, manufacturing activity in the Midwest faced an unexpected decline, pushing it deeper into contraction territory this month as reported by the Kansas City Fed, which indicated a significant drop in orders. On the labor front, weekly applications for unemployment insurance recorded a decrease that outpaced market expectations, with continuing claims also seeing a fall, according to government data. In commodity markets, West Texas Intermediate crude oil saw an increase of 0.8%, reaching $78.17 a barrel.
In contrast, gold prices dropped by 2.3%, settling at $2,361.40 per troy ounce, while silver fell 4.6%, trading at $27.97 per ounce..