Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., March 5, 2024.
Brendan Mcdermid | Reuters
Stocks fell Thursday, as shares of Salesforce slid on a quarterly revenue miss and soft guidance, and traders looked ahead to the release of key U.S. inflation data.
The SPDR Dow Jones Industrial Average ETF Trust, which tracks the Dow Jones Industrial Average, slid 0.8%, while the SPDR S&P 500 ETF Trust, which tracks the S&P 500, lost 0.4%. The Nasdaq Composite 0.6%.
(Note, CNBC is reporting the ETF values rather than the Dow Jones Industrial Average and S&P 500 values directly because of issues with index pricing from the CME exchange.)
Salesforce plunged more than 20% after missing revenue expectations for the fiscal first quarter. The company’s earnings and revenue outlook for the second quarter also fell short of the Street’s estimates. On the other hand, Foot Locker rallied more than 28% on stronger-than-expected earnings per share.
Thursday’s moves come amid a tough, holiday-shortened trading week. The S&P 500 has slipped around 1.2%, while the Nasdaq Composite has shed 0.7% — putting both on track to snap five-week winning streaks. The Dow has tumbled more than 2%, on pace for its second straight losing week.
An uptick in the 10-year Treasury yield, which topped 4.6% for the first time in a month on Wednesday, has hurt investor sentiment this week. Higher yields can be bad news for stock investors, as they reduce the multiples traders are willing to pay for equities and make safer investments, such as Treasury bills and money market funds, more attractive. While the yield slipped back below 4.6% on Thursday, it remained above the 4.5% level, which is considered troublesome for stocks.
Despite the rocky week, the indexes are all on track to end the trading month, which also concludes with Friday’s closing bell, higher. The Nasdaq Composite and S&P 500 have jumped more than 7% and 4%, respectively, in May. The Dow has risen just 0.7% in the month.
Investors should expect continued choppiness in the market as questions swirl around the health of the consumer and path of interest rates, said Clark Bellin, chief investment officer at Bellwether Wealth. He likened recent market action to a wave coming in before going back out.
“We still have some good excitement that’s been built up in the market — a lot of this is momentum investing,” Bellin said. “But momentum investing works until it doesn’t.”
Investors are looking toward Friday’s release of the personal consumption expenditures price index report for April, which is the Federal Reserve’s preferred inflation gauge.
