Major indexes closed with mixed results on Tuesday, with the Dow Jones Industrial Average and S&P 500 inching higher while the Nasdaq fell slightly. In a week with little major economic data, investors focused on earnings reports from key companies.
Disney Takes a Hit Despite Streaming Improvements
One of the day’s significant movers was Disney, which reported its quarterly earnings before the market opened. Despite making notable progress toward profitability in its streaming business, Disney’s shares dropped 10% by the end of the trading day. The streaming unit, which includes Disney+, reported a loss of just $18 million this quarter compared to a $659 million loss a year earlier, suggesting that the company is on track to turn its streaming service into a profitable venture later this year.
CEO Bob Iger, who recently overcame a proxy battle with activist investor Nelson Peltz, indicated that the outlook for subscriber growth and theme park attendance was somewhat subdued, contributing to the stock’s decline.
Other Movers: Palantir Falls, Lyft and Reddit to Report Earnings
Shares of Palantir, a data analytics software company with the U.S. military among its key clients, fell 15% after its earnings report met expectations but did not exceed them. However, the stock is still up nearly 30% for the year, reflecting investor confidence in the company’s long-term potential.
After the bell, earnings reports were expected from companies such as Lyft and Reddit. Notably, Lyft saw its stock surge 60% last quarter due to a typo in its earnings report, causing copy editors to be particularly cautious this time around to avoid another market-moving error.
Dow Rises for Fifth Day; Bank of America Urges Caution on “Sell in May” Adage
While the Dow Jones Industrial Average extended its gains for the fifth consecutive day, analysts at Bank of America issued a note cautioning against following the old Wall Street adage “Sell in May and go away,” which is based on the belief that markets tend to underperform during summer months. The analysts presented data suggesting that markets typically experience “big summer rallies” during presidential election years, providing a counterargument to the seasonal caution.
Despite mixed outcomes for individual stocks, the broader market indicators suggest that investor sentiment remains relatively positive. However, with earnings reports driving market movements and mixed signals on economic growth, traders will need to remain vigilant in the coming weeks.
