It’s a bit of a sour note to end the week on, with Microsoft plummeting 12% (providing the biggest drag on the three leading US stock indices) and the Dow and the NASDAQ in the red today, but overall it has been a very strong week for the US stock market.
Microsoft’s been brought down to earth with a bit of bump, but what we are seeing in action is one of the healthy things that happens in the stock market from time to time: prices correcting themselves after getting a little carried away. Microsoft’s shares have been flying this year, perhaps because analysts hadn’t appropriately lowered their forecasts. Now both have been given a reality check, which lets a little steam out of the market.
Of the 100 or so companies from the S&P 500 that have reported so far, just under two thirds have beaten earnings expectations, which is around the historical average. Only 51% have beaten revenue forecasts, though, which is in keeping with the trend we have seen in the last few quarters.
Approaching the close, the Dow was down 0.14% at 15,528, while the broader S&P 500 was up 0.08% at 1690.
Earnings continue on Monday with McDonald’s, Halliburton and Netflix.