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The Dow Jones Industrial Average fell over 290 points at Friday's opening bell after Amazon.com Inc. (NASDAQ: AMZN), Snap Inc. (NYSE: SNAP), and Alphabet Inc. (NASDAQ: GOOGL) fell short of earnings expectations. The disappointing third-quarter reports and guidance sent all major indexes into the red, pushing the S&P 500 into correction territory.
Markets are likely to exhibit significant volatility today as investors attempt to stem further losses. With all indexes giving up their gains for the year, we're taking a close look at what's behind October's losses – and how we can protect our investments…
Where the Dow Jones Industrial Average Closed on 10/25
Here are the numbers from Thursday for the Dow, S&P 500, and Nasdaq:
|Index||Previous Close||Point Change||Percentage Change|
Now, here's a closer look at today's Money Morning insight, the most important market events, and stocks to watch.
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The Top Stock Market Stories for Friday
- The market roller coaster continued as markets prepared for the U.S. government to release its third-quarter GDP report. This morning, the U.S. Commerce Department reported that Q3 GDP growth came in at 3.5%, a figure that topped expectations. Investors were concerned that the stimulus from tax cuts had begun to fade from the balance sheets of companies while tariffs ate into profits and interest rate hikes slashed investor enthusiasm. Today's report suggests that the impact of tariffs and interest rate hikes has yet to take full effect.
- In an unprecedented move, the European Union has rejected Italy's latest budget plan. The news sent bond prices higher and will force Italian finance ministers to go back to the drawing board. Debt has plagued the Italian economy. In 2017, the country spent as much money servicing its debt as it did on public education. This was the first time that the EU ever rejected a member nation's draft proposal for a budget.
- Finally, rising interest rates continue to batter the U.S. housing market. Sales of new and existing homes have slowed to a crawl. Meanwhile, homeowners are speculating on when would be the right time to sell their homes if we are in the middle of another bubble. Money Morning's Lee Adler offers his insight into the signs of another housing crisis and what you should do if the warning signs begin to creep up on us again. Go here now.
Money Morning Daily Insight
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Three Stocks to Watch Today: SNAP, GOOGL, AMZN
- Shares of Amazon.com Inc. (NASDAQ: AMZN) were off 9% this morning after the e-commerce giant beat third-quarter earnings expectations on Thursday afternoon but disappointed on both revenue and forward guidance. The firm reported EPS of $5.75, a figure that beat $3.14 per share. However, the company's Amazon Web Services division missed revenue expectations and cut its holiday season outlook.
- Snap Inc. (NYSE: SNAP) hit an all-time low in pre-market hours. The owner of social media firm Snapchat issued another weak earnings report, fueling a 12% decline in the share price. Even though the firm did beat both earnings and revenue estimates, Snap said that it expects to lose more active users in the future. Company CEO Evan Spiegel said that the app's recent redesign was rushed and suggested that it may require additional design adjustments in the future. The firm's 186 million daily active users represents a 1% decline from the previous quarter.
- Alphabet Inc. (NASDAQ: GOOGL) stock fell roughly 5% in pre-market hours. The technology giant fell short of revenue expectations but came in on top of earnings estimates. Even though the firm's revenue expectations were up 21% year over year, the firm fell short of the $34.04 billion projected by analysts.
- Today, look for earnings reports from Goodyear Tire & Rubber Co. (NYSE: GT), Roper Technologies Inc. (NYSE: ROP), Colgate-Palmolive Co. (NYSE: CL), Tenneco (NYSE: TEN), Moody's Corp. (NYSE: MCO), and Phillips 66 (NYSE: PSX).
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.