Nasdaq, S&P fall as Tesla, Netflix weigh; Dow poised for ninth straight climb

By Chuck Mikolajczak

NEW YORK (Reuters) – The and Nasdaq fell on Thursday, weighed down by drops in Tesla (NASDAQ:) and Netflix (NASDAQ:) following their quarterly results, but the Dow was higher for a ninth straight day thanks to gains in Johnson & Johnson (NYSE:) following a strong annual forecast.

Tesla’s shares tumbled 9.20% and were on track for their biggest daily percentage drop since April 20 after the electric-vehicle maker reported a drop in its second-quarter gross margins to a four-year low and CEO Elon Musk hinted at more price cuts.

Meanwhile, Netflix slumped 8.24%, and was on pace for its biggest daily percentage fall since December 2022, after the streaming video company’s quarterly revenue fell short of estimates.

“The news last night in Tesla and Netflix, while it’s not the end of the world does give people a reason to wake up and go wow maybe I shouldn’t be chasing these names up here,” said Ken Polcari, managing partner at Kace Capital Advisors in Boca Raton, Florida.

“Let me take some money off the table and redeploy it into big boring names.”

But the Dow rose as Johnson & Johnson gained 5.62% after reporting results and announcing an annual profit forecast raise.

The rose 205.01 points, or 0.58%, to 35,266.22, the S&P 500 lost 25.9 points, or 0.57%, to 4,539.82 and the dropped 264.37 points, or 1.84%, to 14,093.64.

The Dow was poised to record its ninth-straight session of gains, its longest winning streak since September 2017.

The Nasdaq has surged about 35% this year, supported by a scorching rally in megacap growth names such as Nvidia (NASDAQ:) and Meta on optimism over artificial intelligence, a U.S. economy that has proven more resilient than many anticipated and expectations the Federal Reserve was reaching the end of its aggressive rate-hike cycle.

Economic data on Thursday indicated the labor market remains tight, while the housing and manufacturing sectors continue to slump.

United Airlines advanced 3.19% after lifting its full-year profit outlook and posted the highest ever quarterly earnings on booming demand for international travel.

With 77 S&P 500 companies having reported results, second-quarter earnings are expected to have declined 7.9%, Refinitiv data showed, more than the 5.7% fall expected at the start of the month.

Declining issues outnumbered advancing ones on the NYSE by a 1.61-to-1 ratio; on Nasdaq, a 1.94-to-1 ratio favored decliners.

The S&P 500 posted 31 new 52-week highs and two new lows; the Nasdaq Composite recorded 58 new highs and 60 new lows.