Stocks decline on ECB rate cut hint, mixed bag of 2Q earnings

U.S. stocks fell Thursday on a mixed bag of second-quarter earnings from top corporations and a rate-cut hint from the European Central Bank (ECB), which is concerned about slowing global economic growth.

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The European Central Bank opened the door to rate cuts and the restart of bond purchases as ECB chief Mario Draghi said the risk of a recession in the eurozone was "pretty low" and that policymakers did not discuss rate cuts at the meeting. However, Draghi also said a rate cut could be expected if inflation remains too low.

TickerSecurityLastChangeChange %
I:DJIDOW JONES AVERAGES26839.12+22.53+0.08%
SP500S&P 5002970.18-0.09-0.00%
I:COMPNASDAQ COMPOSITE INDEX8061.168992+4.13+0.05%

The session's declines came after the S&P 500 and Nasdaq closed on Wednesday at record highs.

Another busy day of earnings kicked off with Comcast, which reported a profit of 78 cents per share, beating Wall Street predictions. Revenue, however, fell below estimates at $26.86 billion.

Among the major names reporting on Thursday is Southwest Airlines and American Airlines. Both carriers have been forced to cancel thousands of flights as a result of the Boeing 737 Max grounding.

The top executive of the Chicago-based manufacturing firm warned investors on Wednesday that a halt in production of new Max jets may occur if federal approval for a software patch intended to fix the issues that led to the two fatal crashes is delayed.

TickerSecurityLastChangeChange %
CMCSACOMCAST CORP.45.16-0.39-0.85%
LUVSOUTHWEST AIRLINES CO.54.19+0.27+0.50%
AALAMERICAN AIRLINES GROUP INC.27.50+0.15+0.55%

Southwest beat profit estimates with net income of $1.37 per share for the quarter, but the $5.9 billion in sales slightly missed predictions. The Dallas-based carrier is ending service at Newark as a result of the grounding.

Late on Wednesday, Facebook disclosed it is facing a formal antitrust investigation by the Federal Trade Commission, shares slipped despite strong second-quarter financial results.

TickerSecurityLastChangeChange %
GOOGLALPHABET INC.1,221.71+6.00+0.49%
FBFACEBOOK INC.183.75-0.44-0.24%
XLNXXILINX INC.95.98-0.24-0.25%
TSLATESLA INC.257.19+9.30+3.75%
FFORD MOTOR COMPANY8.82+0.04+0.46%

Meanwhile, Tesla shares dropped after the electric carmaker disclosed profit losses that exceeded analyst expectations. The Elon Musk-owned firm continues to expect to sell up to 400,000 vehicles this year.

Chipmakers fell after a disappointing report from Xilinx Inc. The chipmaker fell after saying current-quarter revenue forecast was below market expectations, hit by the impact of U.S. restrictions on selling to Huawei Technologies.

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Ford Motor Co.’s stock is also on the decline after the carmaker failed to meet profit expectations for the second quarter. Company executives, however, continue to tout the progress being made in the $11 billion restructuring effort. There were some bright spots in the results, including improved outcomes in Ford’s China business.

In economic news, U.S. initial jobless claims fell to a three-month low at 206,000, a drop of 10,000.

Durable goods orders for June surged 2 percent, beating estimates for a 0.7 percent rise.