Major U.S. stock indexes were down Friday morning, with the Dow Jones Industrial Average tumbling as financial services stocks slid after earnings.
The Dow Jones Industrial Average was down 0.9%, led by downturns for index components Travelers (TRV) and American Express (AXP) after the companies reported earnings Friday morning. The S&P 500 and Nasdaq Composite were both down about 0.4% and are poised to post losses for the week.
On Thursday, each of the major indexes tumbled, with the Dow falling 1.3%, or more than 500 points.
The big mover in early trading Friday is CrowdStrike (CRWD), which was down more than 8%, after an update to the cybersecurity firm’s software caused an outage in Microsoft’s (MSFT) cloud services, disrupting businesses worldwide Friday. Microsoft shares were also lower.
Trading at the New York Stock Exchange and Nasdaq is operating normally, according to officials at the exchanges.
Large-cap technology stocks, which had helped drive a stock market rally in recent weeks but have slumped more recently, were mixed in early trading. Shares of Apple (AAPL) and Alphabet (GOOGL) were on the rise, while Tesla (TSLA) and AI investor darling Nvidia (NVDA) were down.
Netflix (NFLX), which posted better-than-expected results but issued soft guidance, was up slightly.
Investors will be keeping a close eye on comments from Federal Reserve officials who are slated to speak Friday, as they look for clues on when the Fed could start cutting its benchmark interest rate, which stands at a two-decade high.
Expectations that the Fed could cut the fed funds rate in the coming months as economic activity slows have caused investors to plow money into small-cap stocks that stand to benefit from a low-interest-rate environment.
Treasury yields have also declined recently as hopes for rate cuts have increased. On Friday, the yield on the 10-year Treasury was up slightly at 4.23%, near its highest level in a week.
American Express Drops as Revenue Misses Expectations
5 minutes ago
American Express (AXP) reported larger profits than analysts had expected for the second quarter Friday, despite revenue and net interest income (NII) that fell short of estimates.
The company’s stock was down about 4% in mid-morning trading, making it among the big decliners on the Dow Jones Industrial Average.
The banking and credit card provider reported record quarterly revenue of $16.33 billion, but analysts had expected $16.56 billion. Profits of $3.02 billion, or $4.15 per share, handily beat projections.
American Express joined peers in the finance industry in reporting sequentially lower NII, dropping to $3.73 billion from $3.77 billion in the first quarter.
American Express CEO Stephen Squeri said the company is affirming its revenue growth projections of 9% to 11% for the full fiscal year, while also lifting EPS projections to a range of $13.30 to $13.80, up from $12.65 to $13.15 previously.
CrowdStrike Plunges, Rivals Surge
1 hr 17 min ago
CrowdStrike (CRWD) shares plunged Friday, while those of its rivals surged, after the cybersecurity firm said an update “defect” caused a worldwide outage in Microsoft’s (MSFT) cloud services.
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In a statement, CrowdStrike CrowdStrike CEO George Kurtz blamed the outage on a “defect” in the firm’s update of its Falcon software. The outage affected services globally of airlines, banks, and other businesses Friday.
Investors bought into CrowdStrike’s rivals as the scale of the damage from the cybersecurity firm’s update was increasingly known. Shares of Palo Alto Networks (PANW) SentinelOne (S) jumped in early trading.
“This is a black-eye moment for CrowdStrike, and I think for the cybersecurity sector,” Wedbush analyst Dan Ives told CNBC in an interview. “The big issue is the brand damage, because CrowdStrike today becomes a household name but not in a good way.”
Major Stock Indexes Mixed Ahead of Opening Bell
2 hr 25 min ago
Futures tied to the Dow Jones Industrial Average are down 0.2%.
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S&P 500 futures are up 0.1%
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Nasdaq 100 futures are also up 0.1%.
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