Stocks opened in negative territory Tuesday, with losses accelerating as the session wore on. In focus today were corporate earnings; specifically, results from logistics giant United Parcel Service (UPS, -10.0%) and embattled regional bank First Republic (FRC, -49.4%). Investors also took in the latest economic reports, including concerning consumer confidence data.
Ahead of the open, UPS said first-quarter earnings slumped 28% year-over-year, while revenue was down 6%. Additionally, the company, whose financial results are often seen as a bellwether for the broader economy, said in a press release that due to "challenging macro conditions and changes in consumer behavior," its full-year revenue and adjusted operating margin will likely arrive at the low end of guidance.
Elsewhere, quarterly results from First Republic gave a glimpse into just how brutal the regional banking crisis got in March. The financial firm said deposits fell nearly 41% to $104.5 billion in Q1, much more than analysts were expecting. However, the company added that deposit activity has since stabilized, with total deposits of $102.7 billion as of April 21, down just 1.7% from the end of March. FRC added that it is cutting costs by reducing executive compensation, lowering non-essential projects and activities, and laying off around 20% of its workforce.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
On the economic front, the S&P CoreLogic Case-Shiller National Home Price Index was up 0.2% from January to February, marking its first gain in seven months. Miami, Tampa and Atlanta saw the biggest annual increases in home prices among the 20 cities surveyed, while Las Vegas, Phoenix and Los Angeles saw the biggest decreases.
Meanwhile, the Conference Board said its consumer confidence index fell to 101.3 in April from 104.0 in March, though consumers' outlook for business conditions and the labor market improved. "While consumers' relatively favorable assessment of the current business environment improved somewhat in April, their expectations fell and remain below the level which often signals a recession looming in the short-term," said Ataman Ozyildirim, senior director of economics at the Conference Board, in a press release.
Today's price action was "controlled by risk-off investors, who are concerned about future earnings at a time of slowing consumption, sticky inflation, and a stubborn Federal Reserve," says José Torres, senior economist at Interactive Brokers.
Indeed, the Dow Jones Industrial Average closed down 1.0% at 33,530, the S&P 500 was 1.6% lower at 4,071, and the Nasdaq Composite was off 2.0% at 11,799.
Spotify, KMB among Tuesday's earnings winners
Not all of today's earnings reactions were negative. Music-streaming service Spotify Technology (SPOT) said it had 515 million total subscribers in the first quarter, more than analysts were expecting, sending the communication services stock up more than 5%. Consumer staples stock Kimberly-Clark (KMB, +1.6%) closed higher after the maker of Cottonelle toilet paper and Huggies diapers reported higher-than-expected first-quarter earnings and lifted its full-year guidance. Additionally, fintech stock Fiserv (FISV, +2.4%) popped after the global payments processor reported top- and bottom-line beats for its Q1 results and increased its outlook for fiscal 2023.
This week's earnings calendar will continue to be a main driver of price action, with blue chip stocks Microsoft (MSFT) and Alphabet (GOOGL) releasing their results after tonight's close, and Facebook parent Meta Platforms (META) set to report tomorrow evening.
-
Stock Market Today: Markets Waver as Inflation Continues to EaseStocks gave up early gains as waning consumer price inflation leaves rate-cut bets essentially unchanged.
-
Why Spotify Stock Is Surging Despite Its Earnings MissSpotify stock is notably higher Wednesday after the audio streaming company gave an upbeat fourth-quarter outlook. Here's what you need to know.
-
Why Is Warren Buffett Selling So Much Stock?Berkshire Hathaway is dumping equities, hoarding cash and making market participants nervous.
-
Fed Cuts Rates Again: What the Experts Are SayingFederal Reserve The central bank continued to ease, but a new administration in Washington clouds the outlook for future policy moves.
-
Stock Market Today: Stocks Struggle After Meta, Microsoft EarningsAll three major indexes closed lower on Thursday, making for a grim Halloween.
-
Why Microsoft Is the Worst Dow Jones Stock After EarningsMicrosoft stock is sinking Thursday even after the tech giant reported higher-than-expected earnings for its fiscal first quarter. Here's what you need to know.
-
Meta Stock Slips as Facebook Parent Ramps Up AI SpendingMeta stock is lower Thursday as concerns over the social media giant's increased spending offset a third-quarter earnings and revenue beat. Here's what you need to know.
-
Stock Market Today: Stocks Slide as Solid GDP and Softer Inflation Vex Rate Cut BetsEncouraging economic news damped hopes for accelerated rate cuts.
