STOCKS TUMBLE, AMAZON TANKS, CYNK CRASHES: Here's What You Need To Know
First, the scoreboard:
- Dow: 16,945.80, -138, (-0.8%)
- S&P 500: 1,977.22, -10.8, (-0.5%)
- Nasdaq: 4,445, -26.2, (-0.6%)
And now, the top stories of the day:
1) The lone economic data point of the day was durable goods orders, which grew 0.7% in June, more than the 0.5% that was expected by economists. Nondefense capital goods orders excluding aircraft also jumped 1.4%, better than the 0.5% that was expected. However this metric in May was revised to -1.2% from an earlier report of 0.7% growth. Following the report, Millan Mulraine at TD Securities said, "The underlying tone of this report was disappointing."
2) After last night reporting earnings that showed a wider than expected quarterly loss, Amazon shares took a beating, falling 10%. Amazon was the worst performer in the S&P 500 today. The online retailer also said that next quarter it could take a huge loss of $410 to $810 million, more than the $10 million that analysts were expecting.
3) Visa shares were the worst performer in the Dow, falling nearly 4% after last night reporting better than expected results but giving a full year revenue outlook that was disappointing. Because of the Dow's weighting formula, each 1 point decline in a Dow member takes 6.42 points off the index, so Visa's roughly 8 point decline took about 51 points off the blue-chip index.
4) CYNK Technology, the social media company that has one employee, no reported revenue, no assets, and rose more than 25,000% in about three weeks resumed trading today after a two-week halt by the SEC was lifted. It was an ugly day for the stock. CYNK opened down more than 86% and after briefly rising to about $5.00 per share, the stock closed down 85% at $2.05 per share.
5) An under the radar earnings report out of trucking company Swift Transportation provided a curious bit of economic commentary. Swift said that it is currently battling, "the challenging driver market." In short, the company can't get enough people to drive its trucks. The company said it sees "cost headwinds" into the second half of the year as it signaled it will need to pay more drivers to either retain current drivers or recruit new ones. BI's Rob Wile also noted that the American Trucking Associated has previously warned the country is short 30,000 drivers, with that gap potentially climbing to 200,000 in the next decade.
6) Last night, President Obama sat down with CNBC's Steven Liesman for an interview, and among the topics discussed was "tax inversions," or mergers in which U.S. companies acquire foreign companies and shift their tax base to enjoy lower rates. Obama said that companies changing their mailing address to enjoy lower tax rates are "gaming the system" and "not doing right by the country - and the American people." Following Obama's comments, outspoken entrepreneur Mark Cuban took to Twitter, saying, "If I own stock in your company and you move offshore for tax reasons I'm selling your stock." Cuban also said that if a company is no longer paying taxes, citizens end up making up the difference in other ways.
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