Next week 141 S&P 500 companies report, led by Meta Platforms, Tesla, Mastercard and AbbVie. On the economic calendar: Tuesday: Housing starts; Thursday: Weekly jobless claims; Friday: Consumer sentiment (University of Michigan). The S&P 500 fell 2.0% in the week of October 12 to 16. It is up 12.8% this year.
Day by day: Monday: Coca-Cola (before the open), GE Aerospace (before the open); Tuesday: Philip Morris International (before the open), Netflix (after the close); Wednesday: Meta Platforms (after the close), Tesla (after the close), Lam Research (after the close); Thursday: Mastercard (before the open), Intel (after the close), Procter & Gamble (before the open); Friday: AbbVie (time not set), Chevron (before the open).
The theme of the week: Computer hardware stocks sold off together (median -18.2%, against -2.0% for the index): Hewlett Packard Enterprise -25.1%, Supermicro -24.2%, Dell Technologies -23.1%, Everpure -19.7%, Seagate Technology -18.4%, Sandisk -17.9%. The thread running through it: Investopedia reported “Dell, HPE and NetApp Stocks Slump After Downgrades on Worries About AI Spending”1.
Under the surface, a rotation: the week's 10 biggest losers had been up a median 119% this year going into the week, while its 10 biggest gainers had been down 21%. Investors sold this year's winners and bought its laggards. Barron's described it as “Coca-Cola, Visa and Mastercard Hit Records as Investors Rotate Out of Chip Stocks”2.
Who moved the index: Nvidia (-6.5%) took off the most, about 0.5 of a percentage point, followed by Micron Technology (-14.6%), Broadcom (-8.7%). Those three explain about 48% of the week's move. Pulling the other way: Apple (+2.0%), Eli Lilly (+6.6%), Walmart (+6.7%).
Earnings: 26 S&P 500 companies reported this week and 17 (65%) beat analysts' earnings estimates. The best reaction: Marsh McLennan jumped 4.6% on its report after beating estimates. The worst: Johnson & Johnson dropped 5.7% on its report after beating estimates. Beating was not enough this week: companies that beat averaged a -0.7% move on the day.
Rates and risk: over the week the 10-year Treasury yield fell 14 basis points to 5.1%, the VIX, Wall Street's fear gauge, climbed to 16.5 and oil rose $3.2 to $101.9 a barrel.
Elsewhere, the Nasdaq-100 fell 5.5%, the Dow rose 0.6% and the Russell 2000 (small caps) fell 3.0%. The average S&P 500 stock rose 0.5%, so the biggest companies were the ones dragging.
| Fair Isaac (FICO) No company-specific story in the news; it had been down 61% this year before the week, part of the rebound in this year's laggards. Now down 54% this year. | +15.5% |
| Cognizant (CTSH) No company-specific story in the news; it had been down 27% this year before the week, part of the rebound in this year's laggards. Now down 19% this year. | +11.5% |
| Accenture (ACN) After an analyst raised its price target3. Now down 12% this year. | +10.8% |
| Equifax (EFX) No company-specific story in the news; it had been down 32% this year before the week, part of the rebound in this year's laggards. Now down 25% this year. | +10.6% |
| Brown & Brown (BRO) No company-specific story in the news; it had been down 21% this year before the week, part of the rebound in this year's laggards. Now down 12% this year. | +10.4% |
| Ciena (CIEN) Fell with the week's computer hardware sell-off1. Now up 43% this year. | -25.9% |
| Coherent (COHR) Fell with the week's computer hardware sell-off1. Now up 26% this year. | -25.5% |
| Lumentum (LITE) Fell with the week's computer hardware sell-off1. Now up 123% this year. | -25.4% |
| Hewlett Packard Enterprise (HPE) After an analyst downgrade1. Now up 132% this year. | -25.1% |
| Flex (FLEX) Fell with the week's computer hardware sell-off1. Now up 50% this year. | -24.5% |
| Market | Friday close | Week | Year to date |
|---|---|---|---|
| S&P 500 (SPY) | 763.3 | -2.0% | +12.8% |
| Nasdaq-100 (QQQ) | 709.8 | -5.5% | +15.9% |
| Dow (DIA) | 519.1 | +0.6% | +9.2% |
| Russell 2000 (small caps) (IWM) | 270.4 | -3.0% | +10.6% |
| Average S&P 500 stock (equal weight) (RSP) | 214.1 | +0.5% | +13.1% |
Indexes are tracked by their exchange-traded funds. Rates and oil are the latest daily readings from the Federal Reserve Bank of St. Louis (FRED).
| Day | Company | When |
|---|---|---|
| Mon Oct 19 | Coca-Cola Company (The) (KO) | Before the open |
| Mon Oct 19 | GE Aerospace (GE) | Before the open |
| Tue Oct 20 | Philip Morris International (PM) | Before the open |
| Tue Oct 20 | Netflix (NFLX) | After the close |
| Wed Oct 21 | Meta Platforms (META) | After the close |
| Wed Oct 21 | Tesla, Inc. (TSLA) | After the close |
| Wed Oct 21 | Lam Research (LRCX) | After the close |
| Thu Oct 22 | Mastercard (MA) | Before the open |
| Thu Oct 22 | Intel (INTC) | After the close |
| Thu Oct 22 | Procter & Gamble (PG) | Before the open |
| Fri Oct 23 | AbbVie (ABBV) | Time not announced |
| Fri Oct 23 | Chevron Corporation (CVX) | Before the open |
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See plansResearch only, not investment advice or a recommendation to buy or sell any security. Rankings change as data changes and can be wrong. Torvanta and its founder may hold positions in securities discussed. Past performance does not guarantee future results.