Stocks Can't Hold On

By Alex Eule  |  Monday, July 18

A Fragile Market. Stocks opened higher today, picking up on Friday's momentum. At one point this morning all of the major indexes were up at least 1%, but they couldn't hold the gains. Each of the indexes closed in negative territory, marking the first time since January that they each gave up 1% gains on the same day. 

Stocks remain volatile, and it doesn't take much to upend a rally these days. Monday's culprit seemed to be a report from Bloomberg News indicating that Apple was planning to "slow hiring and spending growth next year in some divisions to cope with a potential economic downturn." The story appeared shortly after 1 p.m., right near stocks' high water mark for the day.  

Apple shares finished down 2.1% on the day. 

The news builds on growing concerns about the tech economy. As Barron's Eric Savitz reports: "The report follows recent indications of slower hiring at both Meta Platforms and Alphabet, and job cuts at Netflix, Microsoft and elsewhere."

It also comes just as tech companies begin to report earnings. IBM unofficially kicked off tech earnings this afternoon. The company posted better-than-expected results, and its CEO told Barron's that the company wasn't seeing the impact of an economic slowdown. “We always remain paranoid,” CEO Arvind Krishna told Eric. “But demand is pretty strong and on a global basis technology is the counterbalance to higher interest rates and inflation.” 

That confidence didn't help IBM stock in late-trading, though. Shares were off about 4% in the extended session on Monday. The company didn't revise its forecast higher, perhaps one reason for disappointment, but it didn't cut the forecast either. The dynamic just shows the fragile state of the tech investor. Netflix reports tomorrow, with Tesla, Twitter, and Snap results coming later in the week. Then Alphabet, Amazon.com, Apple, Facebook-parent Meta Platforms, and Microsoft all report next week. 

While tech stocks struggled, energy was the best-performing sector of the day, up 2.3%. The price of West-Texas Intermediate, the U.S. oil benchmark, rose 5.1% on the day to $102.60 a barrel. 

The banking sector fell 0.4% despite a better-than-expected earnings report from Goldman Sachs. While the firm's investment banking revenue fell -- with IPOs and merger activity way down -- its trading operations are going strong. Bank of America was up 0.1% after its own earnings report. 

DJIA: -0.69% to 31,072.61
S&P 500: -0.84% to 3830.85
Nasdaq: -0.81% to 11360.05

The Hot Stock: Freeport-McMoRan +6.2%
The Biggest Loser: Progressive -5.0%

Best Sector: Energy +2.3%
Worst Sector: Healthcare -2.1%