Dow Jones Futures: Why Applied Materials, Nvidia Earnings Are So Important; Nordstrom, Williams-Sonoma Earnings Too

Dow Jones futures and S&P 500 futures fell slightly late Thursday, while Nasdaq futures lost more ground. After Thursday’s close, Nvidia (NVDA), Applied Materials (AMAT), Nordstrom (JWN) and Williams-Sonoma (WSM) plunged on earnings reports and guidance. Worse, that had a ripple effect on related stocks. Nvidia stock and Applied Materials stock fell, as did chip names such as Advanced Micro Devices (AMD), Lam Research (LRCX), Micron Technology (MU) and Intel (INTC). Target (TGT), Kohl’s (KSS) and RH (RH) retreated with Nordstrom stock and Williams-Sonoma.




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Dow Jones Futures Today

Dow Jones futures edged below fair value. S&P 500 futures retreated 0.15%. Nasdaq 100 futures lost 0.4%, fueled by Nvidia stock, Applied Materials stock and other chips. Remember that overnight action in Dow futures, Nvidia stock and elsewhere doesn’t necessarily translate into actual trading in the next regular session.

In Thursday’s stock market trading, the Dow Jones rebounded some 450 points from its morning low to close up 0.8%. The S&P 500 index rose 1.1%, and the Nasdaq composite added 1.7%. Apple (AAPL) rallied 2.5%, snapping a five-session losing streak. However, Apple stock is still below its 200-day moving average. Apple stock fell a fraction late.

Nvidia Earnings

Nvidia earnings topped estimates, but the graphics-chip maker missed on revenue and gave a stunningly weak forecast for Q4 sales. For Q4, Nvidia expects revenue of $2.7 billion, citing excess inventory, far below estimates for $3.4 billion.

Nvidia stock cratered 17% to 168.45 in late trading. That would be a 14-month low. In Thursday’s session, Nvidia stock had rallied 2.6%.

Meanwhile, Nvidia’s woes spilled over to rival AMD. AMD stock tumbled 5.1% in late trading. AMD stock had closed up 3.3%.

Intel stock lost 0.8% late. The Dow Jones chip giant competes with Nvidia and AMD in server chips and other fields.

Applied Materials Earnings

Applied Materials earnings and revenue were in line with analyst forecasts for the fiscal fourth quarter. But the chip gear giant guided low on current-quarter EPS and revenue, citing “near-term headwinds.”

Applied Materials stock plunged 7.3% late after rallying 4.3% in the regular session. Applied Materials stock has been in a downturn for the past eight months. But it’s a drag on related companies. Lam Research is another chip gear maker with heavy exposure to the memory-chip market. Lam Research stock slid 3.5%. Memory giant Micron’s shares retreated 4%.

Chip stocks had been faring relatively well, rising for the last three sessions. Semiconductors badly lagged the S&P 500 index for much of the year, raising doubts about the health of stock market. Chip stocks account for a significant piece of market capitalization, especially for techs. And chips are in just about everything these days. If chip companies and stocks are struggling, that’s a concern.

Nordstrom Earnings

Nordstrom earnings came in at 39 cents a share vs. views for 64 cents. However, excluding a big charge, Nordstrom earnings came in at 67 cents a share. Revenue narrowly topped, but same-store sales fell short, especially at full-price namesake stores. Nordstrom raised full-year guidance, but it’s still well below analyst consensus.

Nordstrom stock skidded 9.1% late. Shares closed down 3.45%.

Nordstrom stock and other retail names have tumbled this week along with Macy’s (M), Walmart (WMT) and Dillard’s (DDS), though Macy’s and Walmart delivered seemingly good results.

Still, Target and Kohl’s, which report next week, lost about 1% late after closing down around 3%.

Williams-Sonoma Earnings

Williams-Sonoma earnings narrowly topped views, but revenue and same-store sales fell short. The housewares retailer also gave a cautious holiday guidance. Williams-Sonoma stock tumbled 13% late. In Thursday’s session, Williams-Sonoma stock lost 2%.

Upscale home furnishings retailer RH (RH) slid 2% late.

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