Sign InFriday Markets: IT Outage, Netflix Growth, AmEx Forecast
Alex Vellor
Stocks fell sharply on Thursday as investors continued to shed their holdings in large-cap technology companies.
The Dow Jones Industrial Average dropped 533.06 points, or 1.29%, marking a significant decline. The S&P 500 and Nasdaq Composite also experienced losses, slipping 0.78% and 0.70%, respectively. This downturn extended beyond just the major tech names, with nine out of 10 Dow categories and 10 out of 11 S&P 500 sectors seeing losses. Even the Russell 2000, which typically benefits from expectations of interest rate cuts, fell by 1.9%.
Despite the broad market decline, Nvidia (NASDAQ: NVDA) shares rose nearly 3%.
Premarket Movers:
| Company | Stock Movement | Details |
|---|---|---|
| Netflix (NASDAQ:NFLX) | +0.5% | Better-than-expected Q2 results, strong subscriber additions, and ongoing crackdown on password sharing. |
| CrowdStrike (NASDAQ:CRWD) | -10% | Software update caused a global IT outage. |
| Microsoft (NASDAQ:MSFT) | -1.5% | Outage affected devices running Windows operating systems. |
| American Express (NYSE:AXP) | -1.9% | Disappointing revenue growth despite beating Q2 profit estimates. |
| Schlumberger (NYSE:SLB) | +1.5% | Beat Q2 profit expectations, benefiting from steady demand for drilling equipment and technology. |
| Halliburton (NYSE:HAL) | -2.9% | Quarterly profit rise overshadowed by a 3% revenue drop in the North American market. |
| Plug Power (NASDAQ:PLUG) | -10% | Announced a $200 million stock offering amid liquidity issues. |
| Arm Holdings (NASDAQ:ARM) | +2.9% | Morgan Stanley upgraded stance to 'overweight' from 'equal-weight', lifting price target to $190. |
Major IT Outage Disrupts Global Operations
On Friday morning, businesses worldwide faced a massive IT outage due to a problem with the latest tech update from cybersecurity giant CrowdStrike (NASDAQ: CRWD). The issue led to grounded planes and disruptions in banks and financial services.
Additionally, Microsoft users worldwide encountered the "blue screen of death," with their devices stuck in a restarting state. These issues were linked to both CrowdStrike and Microsoft's (NASDAQ:MSFT) Azure cloud computing platform.
CrowdStrike is working to roll back the problematic update, but the company's shares fell as much as 10% in premarket trading.
Netflix Surpasses Expectations
Netflix (NASDAQ:NFLX) exceeded analyst estimates with its Q2 earnings report released after the bell on Thursday.
The streaming giant added more global subscribers and reported a 34% increase in ad-supported memberships compared to the same period last year. With over 277 million global customers, Netflix remains the world's largest subscription streaming service.
However, starting in 2025, Netflix will phase out data on membership numbers and focus instead on revenue and operating margin. The company reported a 17% increase in revenue compared to the previous year.
American Express Raises Profit Forecast
American Express (NYSE: AXP) raised its full-year profit forecast on Friday, driven by its affluent customer base's continued spending on travel, dining, and entertainment.
The company reported a second-quarter profit of $3.02 billion, or $4.15 per share, a 39% increase from the previous year. Excluding a one-time gain from the sale of its fraud prevention technology unit, AmEx earned $3.49 per share, beating analysts' estimates of $3.24 per share. Revenue jumped 9% to a record $16.33 billion, although this was slightly below the estimated $16.59 billion. Despite the strong performance, AmEx shares fell 2% in premarket trading.
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Alex Vellor
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