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Dow Jones wiped out more than 130 points after collapse of 3M stocks

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Dow Jones wiped out more than 100 points on Thursday due to the sharp decline in 3M shares. The blue-chip index declined by 134.97 points and ended the session at 26,462.08 points after the 3M stock price dropped by 12.9%. The company announced a profit lower than expected by analysts and lowered its expectations for the whole year. In addition, it plans to cut 2,000 jobs worldwide. The stocks of 3M had their worst day since October 19, 1987, also known as the Black Monday.

S&P 500 and Nasdaq Composite, however, performed better than Dow amid the appreciation of Facebook and Microsoft stocks.

Nasdaq index

The broader index S&P 500 ended the day with a small drop of 0.04% to a level of 2,926.17 points, with health and communications sectors offsetting the 2% decline in the industrial sector. The technology Nasdaq Composite added 0.21% to its value to 8,118.68 points.

In the bond markets, yields on 10-year and 30-year US government bonds rose to 2.536% and 2.948%, respectively.

In the forex markets, the US dollar index, which tracks the performance of US dollar against a basket of six major currencies, rose by a minimum of 0.01% in the late hours to 98.18 points.

Corporate stocks performance

Cincinnati Financial, Facebook and Lam Research were among the top S&P 500 gainers for the session, while Xilinx, 3M and Freeport-McMoran Copper & Gold were among the worst performers.

Amazon.com Inc shares were up 1.7% after the market closed after the company reported a first-quarter profit that topped estimates, although its second-quarter revenue forecast was largely below expectations. Intel Corp shares fell 7% after the chipmaker forecast current-quarter revenue below analysts’ estimates.

The stocks of Facebook rose by more than 5.5% after its first-quarter data showed promising growth in Stories and ads. At the same time, Microsoft’s stocks added more than 3% to their value after a better-than-expected report and the market value of the technology giant hit the 1 trillion USD mark.

United Parcel Service also delivered a blow, closing 8% lower, after missing estimates from Investing.com on both the top and bottom lines. Rival shipping company FedEx fell by 4%.

Tesla closed 4% lower after it reported an adjusted loss of 2.90 USD per share for the first quarter, wider than the 0.69 USD per share loss expected, with revenue also missing estimates.

Homebuilders were also pressured. DR Horton fell after its better-than-expected quarterly results were offset by its gloomy outlook on revenue. Lennar, KB Home and PulteGroup also closed lower.

Corporate earnings reports

More than 170 S&P 500 companies have reported quarterly results so far, according to FactSet. Of those companies, 78% have posted better-than-expected earnings.

Facebook reported first-quarter 2019 earnings of 0.85 USD per share that lagged the Zacks Consensus Estimate by a whopping 0.81 USD. The figure plunged 50% from the year-ago quarter. The company recorded legal expenses of 3 billion USD (which is not tax-deductible) related to the ongoing US Federal Trade Commission (FTC) investigation of its platform and user data practices. This negatively impacted the first-quarter bottom-line figure. However, revenues of 15.08 billion USD comfortably surpassed analysts consensus estimate of 14.97 billion USD and rose 26% year over year. At constant currency, revenues rallied 30.2%. Geographically, the United States & Canada was the strongest region, with revenues growing 29% year over year, followed by the Asia-Pacific’s 28.3%, Rest of the World’s (RoW) 22.6% and Europe’s 20.2%.

With its quarterly earnings released on Wednesday, Microsoft delivered a clean sweep for investors, beating almost every performance expectation. It had 30.6 billion USD in revenue, up 14% over a year ago, and profit rose 19%, to 8.8 billion USD. Revenue for Microsoft’s server products and cloud services, a proxy for its hybrid products, grew by 27%, beating forecasts from both the company and Wall Street.

After the bell on Thursday, Amazon reported Q1 revenue of 59.7 billion USD (up 17% annually) and GAAP EPS of 7.09 USD (up 117%). Revenue was roughly in line with consensus analyst estimates, while EPS easily beat a 4.70 USD consensus.

Jeff Bezos’ company also guided for Q2 revenue of 59.5 billion USD to 63.5 billion USD (up 13% to 20%) and GAAP operating income of 2.6 billion USD to 3.6 billion USD. Revenue guidance compares with a 62.39 billion USD consensus. Operating income guidance, impacted by Amazon’s decision to step up its investment pace, is below a 4.19 billion USD consensus.