After testing a new all-time high two weeks ago, the Dow Jones Industrial Average has seen its price collapse.
DJI – Daily Chart
The US 30 index tested a previous gap higher from early May, and the 2024 open is 37,560.
US stocks fell Thursday after software giant Salesforce issued disappointing guidance and lower revenue, hurting other software names. The Dow Jones Industrial Average fell almost 1%, while the S&P 500 and the Nasdaq Composite dropped.
Salesforce shares plunged 20% after the cloud-based software company reported its first quarterly revenue miss in 18 years and offered a soft sales outlook.
Weak bookings in Q1 further tested investor patience as the GenAI (generative AI) innovation cycle has yet to inflect top-line results and increasingly becomes a competitive concern,” Morgan Stanley analysts said.
There is a risk of a more significant correction with PCE deflator data on Friday, which could add to fears of “higher rates for longer” in the United States. Volatility in US stocks on Thursday also affected data feeds, with the CME exchange announcing a data freeze that lasted for about an hour.
United Healthcare was another drag on the Dow Jones after the company’s CEO discussed Medicare delays at a health conference on Wednesday. UNH stock is down around 4% in the last 2 days.
CFRA analyst Angelo Zino told Yahoo that the Salesforce dump was an “overreaction. “Although some areas were disappointing, the company still saw growth of 11% during the quarter. He also believes a recovery could happen due to the company’s “recurring revenue nature.”
