There’s a word for closing markets like this, and that word is, “Ouch!” What started off another healthy return to stock-buying behind a better-than-expected private-sector payroll report for last month from ADP ADP took a slight turn toward selling before really hitting the downslope in the final hour of trading.
The Dow, at one point this morning, was up +521 points, finished -461.7, or -1.34%, now barely above the 34K level. The S&P 500 dropped -1.18% but the Nasdaq was worse: -1.83% or -283.6 point. The Russell 2000 fared the worst, -2.34% on the day. Only Utilities finished the day slightly higher.
The first case of the Omicron variant in the U.S. hit news headlines this afternoon, and the market did not ignore this. A San Francisco Covid testing program verified the highly contagious (but otherwise still-mysterious) variant of the coronavirus, which halted bullish spirits in the market and eventually “mutated” into a full-on sell-off, reminiscent of what we saw in Friday’s half-day session.
Perhaps if the sole evidence of Omicron in this country had been in other than a state with 40 million people in it, the reaction to this news might not have been quite as severe. Then again, we knew it was coming — it was just a matter of time.
We saw a moderation in PMI Manufacturing for November — 58.3 versus 59.1 the previous month — and an in-line 61.1% in ISM Manufacturing for last month. Construction Spending for October came in +0.2%, a swing to the positive from the previous month’s -0.1%, but 10 basis points off expectations. And the November 2021 Beige Book showed 12 regions all moving their economies in positive territory, from turnarounds (Cleveland) to solid growth (Dallas), with plenty of modest and moderate reads, in between.
Good thing we’re seeing strong Q3 earnings reports after the closing bell, which is helping push reporting stocks well into the green in late trading:
Crowdstrike CRWD posted a 7-cent beat on its bottom line to 17 cents per share, while quarterly revenues are +63% year over year to $380 million, outpacing the $364.7 million in the Zacks consensus. Subscriber revenue was up a robust +67% year over year. Shares initially shot up +4.2% before ebbing back to the +1.5% range in late trading. The Silicon Valley cybersecurity firm stock is essentially flat on the year, while big earnings surprises continue quarter after quarter.
Snowflake SNOW posted much better-than-expected revenues in its Q3 report this afternoon: $334 million versus $304 million anticipated, with a big upgrade in revenue guidance for Q4. Whereas the Zacks consensus for next-quarter revenues had been for $337 million, the Montana-based cloud-warehousing tech firm now expects between $345-350 million — for its product revenues alone! As a result, shares have shot up +12.5% in late trading, more than making up for the -8.5% sell-off in Wednesday’s bloody regular session.
Brand retailer PVH PVH, owner of Tommy Hilfiger and Calvin Klein merchandise, put up a mixed Q3 report after the closing bell. While $2.76 per share represents a big beat over the $2.07 expected, sales in the quarter came in lower: $2.33 billion versus the $2.40 billion in the Zacks consensus. The company said it took a -4% hit from port and logistics issues in Q3, due to global supply chain headwinds across sectors. Shares are down slightly in late trading, but are now only about +8.5% year to date.
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