The stock market sold off hard Thursday, wiping out Wednesday’s gains. The S&P 500 hit fresh bear market lows. The Nasdaq composite has not quite undercut its June lows, but the big-cap Nasdaq 100 did, led by Apple stock and Tesla (TSLA).
Treasury yields rebounded somewhat Thursday, while jobless claims fell to a five-month low, something the Federal Reserve does not want to see. Apple (AAPL) and CarMax (KMX) spurred broad losses Thursday. After slashing losses Wednesday spurred by a report of scaled-down iPhone production due to lackluster demand, Apple stock sold off hard Thursday, partly on an analyst downgrade, with iPhone chipmakers also struggling.
CarMax (KMX) badly missed earnings views Thursday morning, warning of “affordability challenges.” For largely similar reasons, Moody’s downgraded its outlook for the global automotive industry to negative from stable. KMX stock crashed, sinking other auto dealers. But General Motors (GM), Ford Motor (F), Stellantis (STLA) and Tesla stock also sold off.
Tesla has a lot of news coming up. Tesla will hold its annual AI Day on Friday night. Over the weekend, Tesla will likely release Q3 delivery figures. But TSLA stock investors won’t have a chance to respond to those events until Monday morning.
Nike earnings and sales narrowly topped fiscal first-quarter consensus. But gross margins fell significantly vs. a year earlier, mostly on liquidating excess inventory in North America. North America inventory surged 65% vs a year earlier. The Dow Jones athletic apparel giant said it will take “decisive action” to get rid of wanted wares.
NKE stock sold off 9% in extended action. Nike stock slid 3.2% in Thursday’s session to 95.52, hitting a fresh two-year low intraday.
Micron earnings slightly topped, while revenue fell short. The memory-chip giant guided significantly lower for the current fiscal first quarter. It also plans to slash wafer fab equipment spending by up to 50% in the current fiscal year vs. fiscal 2022.
MU stock edged lower in overnight trading. Micron stock fell 1.9% to 50.01 in Thursday’s session, after hitting a 23-month low last week.
Micron’s capital spending cut is bad news for memory-exposed chip-equipment giants such as Applied Materials (AMAT), KLA Corp. (KLAC) and Lam Research (LRCX). All three stocks retreated modestly in extended action.
In other news, IBM (IBM), slashed its quarterly dividend by 78% to 37 cents a share. IBM stock edged higher in overnight action.
Dow Jones Futures Today
Dow Jones futures rose 0.2% vs. fair value. NKE stock and IBM are Dow Jones components. S&P 500 futures climbed 0.3% and Nasdaq 100 futures advanced 0.3%.
At 8:30 a.m. ET, the Commerce Department will release its August personal income and consumer spending report. Investors will focus on the PCE price index, the Fed’s favorite inflation gauge. The overall PCE index should show a slightly cooler 6.1% gain vs. a year earlier. But core PCE inflation is seen picking up to 4.8% from 4.6%.
Stock Market Thursday
The stock market fell sharply at the open and remained deep in the red all day, closing only modestly above session lows.
The Dow Jones Industrial Average gave up 1.5% in Thursday’s stock market trading. The S&P 500 index sank 2.1%. The Nasdaq composite skidded 2.8%. The small-cap Russell 2000 declined 2.2%.
Apple stock slumped 4.9% to 142.48, hitting its worst levels since early July, though still some distance from June’s low. Bank of America downgraded Apple stock to neutral with a 160 price target.
CarMax earnings fell 54% vs. a year earlier, far below consensus. Used-car pricing has started to come under pressure, and the auto dealer cited affordability issues. KMX stock dived nearly 25%. Carvana (CNVA) plunged 20%.
The CarMax miss and Moody’s industry downgrade slammed automakers. GM stock sank 5.65%, Ford 5.8% and Chrysler parent Stellantis 4.8%. Tesla stock fell 6.8%, tumbling from near its 50-day and 200-day lines, but just held above short-term lows.
The 10-year Treasury yield rose 4 basis points to 3.75%, after hitting 3.81% intraday. That follows Wednesday’s drop of 26 basis points. Even so, the benchmark Treasury yield is still on track for a ninth straight weekly gain.
U.S. crude oil prices fell 1.1% to $81.23 a barrel.