Stock market today: Most of Wall Street rises, but falls for some big tech stocks drag indexes lower

By STAN CHOE
AP Business Writer

NEW YORK (AP) — Most U.S. stocks rose Thursday, but indexes nevertheless stumbled because of sharp drops for some influential technology giants. Salesforce dropped to its worst day in nearly 20 years.

The S&P 500 sank 31.47 points, or 0.6%, to 5,235.48, even though the majority of stocks within the index and across Wall Street were higher. The Dow Jones Industrial Average dropped 330.06, or 0.9%, to 38,111.48, and the Nasdaq composite lost 183.50, or 1.1%, to 16,737.08.

Salesforce, which helps businesses manage their customers, lost nearly a fifth of its value after reporting weaker revenue for the latest quarter than analysts expected. The cloud-based software company also gave forecasts for revenue in the current quarter and fiscal year that fell short of Wall Street’s. Shares tumbled 19.7%.

Kohl’s fell even more, 22.9%, after reporting a surprise loss for the latest quarter when analysts were expecting to see a profit. The retailer said sales fell from a year earlier as customers pulled back on clearance items. It cut its forecasts for sales this year because of the stumble.

And Nvidia finally ran out of momentum after blowing past analysts’ expectations in its latest profit report, which fed more fuel into Wall Street’s frenzy around artificial-intelligence technology. Nvidia sank 3.8% for its first drop since soaring more than 20% following its profit report last week. The chip company was an even heavier weight on the S&P 500 than Salesforce.

Helping to support the market were better-than-expected profit reports from a range of companies. Best Buy topped forecasts even though its revenue fell short last quarter, and its stock rose 13.4%. Foot Locker ran 15% higher after likewise reporting better-than-expected profit despite ringing up sales shy of analysts’ forecasts.

Stocks also broadly got a boost from easing Treasury yields in the bond market. That helped most stocks on Wall Street to climb, and the smaller stocks in the Russell 2000 index rallied 1%.

The drop in yields offered relief after they had climbed earlier this week on worries about tepid demand for Treasury bonds following several U.S. government auctions. Higher yields put downward pressure on all kinds of investments.

Yields fell Thursday after a couple reports showed the U.S. economy isn’t quite as strong as expected. The hope on Wall Street is that the economy can cool down, but not by too much, so that the Federal Reserve can hit a precise landing where it gets high inflation under control without causing a bad recession.

One report showed more U.S. workers applied for unemployment benefits last week than expected, though the number of layoffs still remains low compared with history. Another suggested the overall U.S. economy’s growth may not have been quite as strong as earlier thought.

A slowdown in the economy could give the Federal Reserve more confidence that inflation is sustainably heading down to its 2% target. That in turn could convince it to cut the federal funds rate, which has been sitting at the highest level in more than two decades.

The yield on the 10-year Treasury fell to 4.54% from 4.62% late Wednesday. The two-year yield, which more closely tracks expectations for Fed action, fell to 4.92% from 4.98%.

The more important data point will likely arrive Friday, when the U.S. government offers the latest monthly update on a gauge of inflation that the Federal Reserve prefers to use. That report “could dominate market sentiment until next Friday’s jobs report,” according to Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.

Until then, the tail end of earnings reporting season could offer the main drivers for the market. Profits have largely been better than expected for the start of 2024.

Outside of Salesforce, other tech-related companies had warmer market receptions to their latest profit reports.

C3.ai jumped 19.4% after the software company topped expectations for both profit and revenue in the latest quarter. HP gained 17% after edging past forecasts for earnings.

Many retailers are also reporting, as they usually do to close each earnings season, and scrutiny is high because of worries about whether U.S. households can keep spending. Still-high inflation is hurting them, particularly those making lower incomes.

Dollar General swung from gains to losses after beating profit forecasts and edging past expectations for revenue in the latest quarter. The retailer, which serve many lower-income customers, said it saw strong traffic growth at its stores through the quarter. Dollar General also gave a forecast for profit over the full year that was in line with analysts’ expectations, but its forecast for this quarter’s fell short. Shares fell 8.1%.

Build-A-Bear Workshop tumbled 13.9%. The company, which lets customers build their own stuffed animals, reported worse drops in revenue and results for the latest quarter than analysts expected. The company said it had to contend with a “weaker spending environment” overall that dragged on its business.

In stock markets abroad, indexes rose modestly in much of Europe after struggling in Asia.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.