After Market: Summer Earnings Season Opens with a Clunk

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Wall Street suddenly got cautious just as earnings season got underway, and momentum stocks got clobbered Tuesday. Alcoa (AA), whose report marks the unofficial start of each earnings season, released its numbers after the bell, and then gained 0.75 percent. But the Dow Jones industrial average (^DJI) dropped 117 points, the tech heavy Nasdaq composite (^IXIC) slipped 60 points, and the Standard & Poor's 500 index (^GPSC) was down 13 points.

Momentum stocks -- in this case, mainly Internet and biotech stocks -- got hammered. Salesforce.com (CRM) was down more than 4 percent, Tripadvisor (TRIP) fell 5.5 percent, Netflix (NFLX) dropped more than 3 percent, Facebook (FB) was down close to 4 percent, and Tenet Healthcare (THC) lost 2.5 percent. First Solar (FSLR) was another big loser, down almost 5 percent.

And even an analyst upgrade for Groupon (GRPN) from neutral to buy failed to help the stock. It dropped more than 2.5 percent.

Airline stocks were hit with another day of selling. Delta (DAL) fell more than 1 percent, Southwest (LUV) dropped more than 1.5 percent, and JetBlue (JBLU) was lower by more than 1 percent. But United Continental (UAL) bucked the trend, gaining more than 2 percent. Analysts say the sell-off in the airline sector is overdone, but investors clearly aren't convinced. Delta is down by 9 percent over the past five days.

And cupcake maker Crumbs Bake Shop (CRMB) fell apart dropping 71 percent. The company announced it is shuttering all of its stores because of plummeting sales.

PetSmart (PETM) fell slightly a day after rallying. News recently broke that major investor Longview Asset Management wants the company to sell itself. Over the past 5 days, the stock is up 13 percent.

AbbVie (ABBV) upped its bid for U.K. biopharma company Shire by 11 percent and AbbVie's stock dropped 3 percent.

Pharma company Mylan (MYL) also fell slightly after announcing it has launched a generic product to fight hypertension.

And finally, botox maker Allergan (AGN) bucked the downward trend, gaining slightly a day after activist investor Bill Ackman proposed bringing in a new group of directors.

-Produced by Karina Huber.

What to Watch Wednesday:
  • The Mortgage Bankers Association releases weekly mortgage applications at 7 a.m. Eastern time.
  • The Federal Reserve releases minutes from its June interest rate meeting at 2 p.m.
  • WD-40 Co. (WDFC) releases quarterly earnings after U.S. markets close.

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12 Comments

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Iselin007

How about those approval ratings.

July 09 2014 at 9:59 AM Report abuse -1 rate up rate down Reply
ted_wilson7

Summer's always a " clunk"

July 09 2014 at 12:08 AM Report abuse rate up rate down Reply
YourFtr

Panama Canals and World War III.....
( Don't mistake fast typing errors for miss-spellings ! )

July 08 2014 at 11:31 PM Report abuse -1 rate up rate down Reply
YourFtr

Those Liberals Chortling over their stock portfilios and retirement accounts should realize
that the Obama Regime is daily putting the US in a worse strategic position in the world...
No intelligent direction of things in the Middle east.....
No Intelligent control of the US Borders.......
Allowing the Russians and the Chinese to control both the old and the to be built Pnama Canals......
You had better cash in your stocks and find a defensible position in the country with your own water supply and food for at least 7 years; as everybody will riot as theer will be no food after World War II Hits.
At that point you will realize that the Obama Regime was a Loser in more ways than one and you voted for him...Twice !!??

July 08 2014 at 11:30 PM Report abuse -1 rate up rate down Reply
msherer260

If you were CEO of a huge company would you be worried about health care and minimum wage shake outs right now.....and would it not be smart to bury some profits now and hold things togeather........

July 08 2014 at 5:59 PM Report abuse -2 rate up rate down Reply
mikco99

The market seems to be "monkey see, monkey do" I just sit on my investments and don't fiddle with them. I seem to be doing fine for the last four or five years. I only cash out when I really need money for an emergency. (new roof, car repair, etc.) I'm still ahead from the 2007,2008 years.

July 08 2014 at 5:35 PM Report abuse +1 rate up rate down Reply
1 reply to mikco99's comment
merstockgto

Just hang in there like I do. The old saying, if you can't stand the heat in the kitchen get out. But getting out too soon is a big no no.

July 09 2014 at 12:48 AM Report abuse -1 rate up rate down Reply
Iselin007

The history channel if still around ,would never have the time to do a history of the current numerous titans. Times move too fast now , I don't believe any recovery will last before it is a bust..

Today people may not want to live longer seeing how their forced out of the workforce before they can even pay off a mortgage or collect SSI.

July 08 2014 at 5:34 PM Report abuse -1 rate up rate down Reply
1 reply to Iselin007's comment
analyst0042

Well I have an idea for you,,,,get your family into your car..take a hose from the tailpipe to inside your car..close all windows as tight as possible...turn on the ignition (now do not screw this up with a low fuel tank!). I think this will solve all your problems. No need to thank me.

July 08 2014 at 8:24 PM Report abuse rate up rate down Reply
Iselin007

The markets have changed so much yet many think they can keep going up with out a big drop.To have so many wealthy people after the race to a new Global market destroy so many Americans families is shameful.

July 08 2014 at 5:24 PM Report abuse -1 rate up rate down Reply
1 reply to Iselin007's comment
analyst0042

I am curious how much of an income in your mind should be considered wealthy. I am interested in your state of mind.

July 08 2014 at 8:22 PM Report abuse -1 rate up rate down Reply
1 reply to analyst0042's comment
Iselin007

No need to take an interest because of your curious moments of self gratification.

July 09 2014 at 9:54 AM Report abuse +1 rate up rate down