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Key Takeaways
- The S&P 500 dropped 1.9% on Thursday, Oct. 31, as signs of major firms spending big bucks to build out their AI platforms weighed on the tech sector.
- Huntington Ingalls shares sank after the military shipbuilder missed quarterly profit estimates and cut its full-year sales forecast.
- Labor market strength helped drive a strong quarter for HR and payroll services provider Paycom Software, and its shares surged.
Major U.S. equities indexes never found a festive mood in the Halloween trading session, carving lower as investors digested massive spending plans by tech giants aiming to build their artificial intelligence (AI) infrastructure.
The S&P 500 dropped 1.9% on Thursday, while the Dow fell 0.9%. The Nasdaq felt the heaviest impact of a gloomy day in the tech sector, plunging 2.8%.
The steepest drop in the S&P 500 hit shares of Huntington Ingalls Industries (HII), the largest military shipbuilding company in the U.S., which sank 26.2%. Third-quarter revenue and earnings per share (EPS) fell short of analysts’ estimates, and Huntington Ingalls reduced its full-year sales forecast. The company said uncertainty about agreements with the U.S. Navy, as well as labor and supply chain issues, contributed to a weaker outlook for its shipbuilding business.
Estée Lauder (EL) shares plunged 20.9% after the luxury beauty products firm withdrew its outlook for the full year and cut its dividend. The cosmetics maker also reported year-over-year declines in quarterly revenue and organic sales, citing weakness in China and Asia travel markets. Estée Lauder also announced a shakeup in its executive leadership, with Stéphane de La Faverie set to take over as chief executive officer (CEO) at the beginning of next year.
Shares of automotive technology supplier Aptiv (APTV) dropped 17.7% following the company’s third-quarter earnings release. Production challenges across the car industry, reduced customer scheduling, and bumps along the road to an electric vehicle (EV) future weighed on Aptiv’s performance. Still, the company said it has adopted cost-cutting measures to adapt to the difficult environment.
Paycom Software (PAYC) shares skyrocketed on Thursday, posting the top daily performance in the S&P 500 with a gain of 21.3% despite what amounted to a frightful trading session for the broader tech sector. The payroll and human resources (HR) software firm reported better-than-expected sales and profits for the third quarter, with strength in the labor market helping boost demand for its employee management solutions.
Entergy (ETR) shares surged 15.2% after the Louisiana-based electric utility beat profit estimates for the third quarter and lifted its full-year outlook. Cost reductions helped drive the earnings beat, even as revenue slipped year-over-year, missing forecasts. Entergy also announced plans for several clean energy projects.
Pulp and paper products manufacturer International Paper (IP) topped profit estimates with its third-quarter results, and its shares climbed 13.3%. International Paper also said it is in the early stages of reviewing strategic options for its global cellulose fibers business and announced that it will close its mill in Georgetown, South Carolina.