US stocks retreat from records, Tesla dives

Parvez Jabri July 26, 2019

NEW YORK: Wall Street stocks fell Thursday, pulling back from records with several prominent companies, including Tesla and American Airlines suffering bruising declines following disappointing earnings reports.

Stocks have been bolstered in recent weeks by expectations that the Federal Reserve will cut interest rates next week.

But strong economic data, including Thursday’s report showing an increase in durable goods sales in June, could lead to a less dovish Fed announcement, some investors worry.

“Good news has become bad news with the fear that the Fed will not be as accommodating as anticipated,” said Quincy Krosby of Prudential Financial.

The Dow Jones Industrial Average dropped 0.5 percent to 27,140.98.

The broad-based S&P 500 shed 0.5 percent to 3,003.67, while the tech-rich Nasdaq Composite Index tumbled 1.0 percent to 8,238.54.

Both the S&P 500 and Nasdaq had ended at records on Wednesday.

A heavy schedule of corporate earnings battered shares of some companies that disappointed, including Tesla, which plunged 13.6 percent, Ford, which sank 7.8 percent and chemical giant Dow, which shed 3.8 percent.

American Airlines also stumbled, diving 8.4 percent after raising its full-year estimate of the hit to earnings from the Boeing 737 MAX to $400 million, up $50 million.

Southwest Airlines, another big Boeing customer, finished 0.4 percent higher after pushing back the target date for returning the MAX to service to January 2020, more than two months later than the current timeframe.

Southwest said it has begun talks with Boeing about compensation for the impact from widespread flight cancelations and delayed deliveries.

Boeing, which has set aside $4.9 billion to compensate customers, dropped 3.6 percent, its second big decline in a row after reporting on Wednesday its biggest quarterly loss ever due to the MAX.

Copyright AFP (Agence France-Press), 2019

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