The stock market tumbled after poor earnings and economic reports shed light on a struggling economy and a less-than-confident base of consumers.
One day after making encouraging reversals, the stock market indexes fell sharply as lackluster earnings reports and economic reports dragged stocks lower. Consumer discretionary stocks were the worst performing sector. Investors rushed back into long-dated U.S. Treasury bonds, sending yields falling again.
The S&P 500 was off 2% while the Nasdaq composite sold off 3.1%. Small caps also slid, with the Russell 2000 down 2.3%.
The Dow Jones Industrial Average was down 1.6%.
U.S. Stock Market Today Overview
Last Update: 12:10 PM ET 4/26/2022
Volume rose on the Nasdaq and fell on the NYSE compared with the same time on Monday.
Yields fell as the 10-year Treasury note dipped 9 basis points to 2.73%. Oil prices climbed pack to over $101 a barrel for crude oil.
Stock Market Gets Economic Data
Orders for durable goods rose 0.8% in March, below views for a 1% increase. Excluding transportation items, orders rose 1.1%, and well above forecasts for a 0.5% increase. Core capital goods also beat views with a 1% rise.
Core orders, which consists of nondefense items excluding aircraft, rose 1%. It marked the 12th gain in the past 13 months.
The Conference Board’s measure of consumer confidence was down 0.3 point in April to a 2-month low of 107.3. “Given all the headwinds swirling around out there, notably, the highest inflation rate in over four decades, it is a wonder that confidence didn’t take an even bigger tumble,” says BMO Capital Markets economist Jennifer Lee.
The S&P CoreLogic Case-Shiller 20-city home price index rose 2.4% on an adjusted basis in February, above forecasts for a 1.5% increase. The index surged 20.2% from a year ago, also above estimates.
Meanwhile, a heavy batch or earnings were not accepted well by the stock market.
General Electric (GE) reported above forecast first-quarter sales and earnings, but free cash flow was less than expected. GE’s outlook remained rocky amid uncertainties linked to the Russia-Ukraine war. GE stock fell 12%.
But on the upside, miner Arch Resources (ARCH) jumped 13% after beating analysts’ expectations on earnings and sales. Arch reported earnings of $13.02 per share on sales of $868 million for the first quarter. Analysts had expected EPS of $11.68 on sales of $725 million. Arch shares, part of the stock market-leading coal group, soared past their 50-day line in heavy volume.
Pepsi, Raytheon, Entegris Earnings
PepsiCo (PEP) shares gained 0.4% after the beverage and snack maker reported better-than-expected profit and sales for the first quarter. Shares were just below the buy point of 175.07 of a cup-with-handle pattern, according to MarketSmith.
Raytheon (RTX) reversed higher and is proving sticky near the 100 price level, a key round number, after the military hardware maker beat first-quarter estimates and revenue came in slightly below views. The company’s guidance was disappointing, but it said it will buy back at least $2.5 billion of its stock this year.
Raytheon stock fell below the 50-day moving average Monday but closed back above the line. Today, it’s again finding support at the line.
This Chip Gear Giant, And Tesla’s New Base
Although the company believes supply chain problems will remain a problem all year, it still expects record demand. It could be taken as a good sign ahead of other earnings reports in the industry.
Innovator IBD 50 ETF (FFTY) fell 1.1%.
Tesla (TSLA) was the worst performing IBD 50 stock, down nearly 10% in heavy volume.
Tesla stock is forming a cup-with-handle base, but the handle is now too deep with a 16% decline.
Alphabet, the parent of Google and YouTube and a giant among techs in the stock market today, is expected to earn $25.70 a share, a drop of 2% from the year-ago period, according to FactSet. Sales are estimated to climb 23% to $68 billion. The stock is trading near nine-month lows.
Analysts expect Microsoft, down 3% today, to earn $2.19 a share, up 12%, on sales of $49.02 billion. The stock market leader is testing support around the 270 price level. Microsoft remains in both Leaderboard and on the IBD Long-Term Leaders.
Visa (V) was down 3.2% ahead of its earnings report after the close today.
Follow Michael Molinski on Twitter @IMmolinski
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