U.S. stocks experienced a notable decline on Thursday as Microsoft ($MSFT) shares fell post-earnings, causing the Dow Jones Industrial Average and the S&P 500 to report their first monthly losses in six months. The Nasdaq Composite dropped by 2.8%, closing at 18,095.2, while the S&P 500 fell by 1.9% to 5,705.5.
The Dow Jones Industrial Average lost 0.9%, ending the day at 41,763.5. The technology sector suffered the most significant decrease, down 3.6%, with only utilities and energy sectors managing to close higher. In terms of monthly performance, the Dow declined by 1.3%, while the S&P 500 reported a loss of 1%.
These declines followed five consecutive months of gains. The Nasdaq witnessed a drop of 0.5% in October, breaking a two-month winning streak. Focusing on Microsoft, shares plunged 6.1% on Thursday, marking the largest decline on the Dow and among the most severe in the Nasdaq. The company had announced late Wednesday that it anticipates fiscal second-quarter revenue growth for its Azure cloud-computing business to be between 31% and 32% in constant currency.
In its recently concluded quarter, Microsoft reported a 34% annual increase for Azure and other cloud services measured at constant currencies. In other company news, Estee Lauder ($EL.US) withdrew its fiscal 2025 guidance and slashed its dividend after experiencing a fall in first-quarter sales that exceeded expectations, particularly due to challenges related to China and Asia travel retail.
The cosmetics company's shares fell dramatically by nearly 21%, making it the second-worst performer on the S&P 500. Meanwhile, Paycom Software ($PAYC) emerged as the top gainer on the S&P 500, climbing 21% after it announced a third-quarter earnings beat late Wednesday. Comcast ($CMCSA) disclosed its consideration of a potential spin-off of its cable brands to better adapt to the growing trend of cord-cutting.
The company reported better-than-expected results for the third quarter, seeing its shares rise by 3.4%, placing it among the strong performers on the Nasdaq. On the bond market, the U.S. 10-year yield rose by 2.2 basis points to 4.29%, while the two-year rate increased by two basis points to 4.17%. In economic developments, U.S.
consumer spending showed stronger than anticipated growth in September, while the Federal Reserve's preferred inflation metric remained stable on an annual basis, as government data indicated. BMO Capital Markets noted that, "The ongoing strength in consumer spending suggests upside risk to (fourth-quarter) growth estimates, ruling out another (50-basis-point) rate chop from the Fed next week.
However, with headline inflation nearly back to the target and employment costs moderating, a (25-basis-point) move remains firmly on the table." According to government data, weekly applications for unemployment insurance in the U.S. unexpectedly declined. Additionally, U.S.-based employers cut 55,597 jobs this month, representing a 24% decrease from September but a 51% year-on-year increase, as reported by Challenger Gray & Christmas. Forecasts suggest that on Friday, Bureau of Labor Statistics data will reflect an addition of 101,000 jobs to the U.S.
economy in October, a decrease from the previous month’s gain of 254,000, according to a Bloomberg poll. In commodities, West Texas Intermediate crude oil increased by 2.8%, trading at $70.54 per barrel on Thursday, following gains in the prior session. D.A. Davidson remarked that prices have surged on optimism over U.S.
fuel demand after a surprising drop in crude and gasoline inventories. Additional reports indicating that the Organization of the Petroleum Exporting Countries and its allies might delay a forthcoming production hike have also buoyed prices. Gold prices fell by 1.5% to $2,757.90 per troy ounce, while silver decreased by 3.6% to $32.85 per ounce..