Nasdaq 100, Dow Jones, S&P 500: Dow Turns Negative for 2023; Apple Reports After Close

US Stock Market Highlights

• Stocks drop due to regional bank sector fears
• Dow Jones enters negative territory for the year
• Paramount Global suffers major stock decline
• Apple set to report its fiscal second-quarter results

US Stock Market Overview

The major U.S. stock indexes are down sharply at the mid-session on Thursday. This drop was sparked by concerns of contagion in the regional banking sector. Furthermore, investors analyzed the Federal Reserve’s recent 25 basis point rate hike and the accompanying comments made during Wednesday’s meeting.

The Dow, the worst performing major average, is being pulled lower by weakness in the stock prices of Boeing, Disney, Goldman Sachs, and American Express. Additionally, the Dow turned negative 0.3% year to date on Thursday.

At 15:11 GMT, the blue chip Dow Jones Industrial Average is trading 33158.46, down 255.78 or -0.77%. The benchmark S&P 500 Index is at 4071.31, down 19.44 or -0.48% and the tech-heavy NASDAQ Composite is at 12000.52, down 24.81 or -0.21%.

Regional Bank Stocks Plummet, Hit New Lows

The stock market experienced a decline in regional banks, with every stock in the SPDR S&P Regional Banking ETF trading lower. The fund lost more than 8%, while the index dropped by 41% since the start of 2023.

Shares of PacWest, Western Alliance, and Zions Bancorporation suffered significant losses, with the former dropping over 41% after CNBC reported that it is exploring strategic options, including a possible sale.

Jeffrey Gundlach, CEO of DoubleLine, believes that the regional banking sector will not recover until the Federal Reserve cuts interest rates. He also predicts further failures if rates remain high. Despite some small gains by Home BancShares, the trend for regional banks in the stock market is negative.

Dow Jones enters negative territory in 2023

On Thursday, the Dow Jones Industrial Average entered negative territory for 2023. This was mainly due to significant declines in the stock prices of Boeing, Disney, Goldman Sachs, American Express, Caterpillar, and JPMorgan, each contributing 15 or more points to the average’s decline.

The 127-year-old average is at risk of dropping below its 50-day moving average of 33,076.75 for the first time since March 31. If it closes below 33,147.25, the Dow will end the day in negative territory for the year.

The Dow’s highest close for the year so far occurred on January 13. In that session, it reached 34,302.61, a 3.49% increase from the final trading day of 2022.

Paramount Global Stock Drops 25% After Earnings Miss

Paramount Global experienced a decline of over 25% in its stock price on Thursday after missing analysts’ earnings and revenue estimates, and reducing its quarterly dividend. This is the first time that the media company has lowered its dividend since 2009. It has also planned to sell its non-core assets to boost free cash flow and halt streaming losses by the end of 2024. Furthermore, the company is looking to sell Simon & Schuster publishing company by the end of this year after the deal failed to materialize last year. Paramount’s streaming revenue rose, but direct-to-consumer losses widened.

The negative sentiment surrounding Paramount Global also impacted other media and entertainment stocks. Shares of Fox Corporation, Walt Disney, and DISH Network each declined by approximately 4%. Meanwhile, Warner Bros. Discovery saw a drop of around 3%.

Apple Reports Q2 earnings After Close

Apple is set to report its fiscal second-quarter results on Thursday, with analysts predicting earnings per share of $1.43 and revenue of $92.96 billion.

The tech giant had previously warned investors to expect a down quarter, with sales expected to drop by approximately 5%. Sales of iPads and Macs are expected to experience the sharpest declines. Additionally, analysts predict annual declines across all of Apple’s hardware product lines.

Some analysts hope that Apple will show resilience because of its premium products and loyal customers.  Others are concerned about declining demand.

Apple is also expected to update investors on its capital return authorization. Analysts are anticipating plans for up to $90 billion in share repurchases and dividends.