By Yasin Ebrahim
Investing.com -- The Dow slumped Thursday as Micron-led plunge in tech reined in bullish optimism, putting stocks on course to snap their two-day win streak.
The Dow Jones Industrial Average fell 1.05%, or 349 points, the Nasdaq Composite slumped 2.2%, and the S&P 500 slipped 1.4%.
Micron Technology Inc (NASDAQ:MU) plunged more than 3% after reporting quarterly results that missed on the top and bottom line as gloomy macroeconomic background continued to weigh on demand.
While the chip maker's outlook for the fiscal second quarter was “soft”, Deutsche Bank says, there is a risk for more downside as Micron’s estimates point to a demand recovery toward mid-CY23, which “seems optimistic.”
The results from Micron sent chip stocks sharply lower, with Lam Research Corp (NASDAQ:LRCX), Applied Materials Inc (NASDAQ:AMAT) and Advanced Micro Devices (NASDAQ:AMD) down heavy on the day.
Consumer stocks continued to be weighed down by an ongoing drop in Tesla (NASDAQ:TSLA), taking total losses to about 27% over the last six weeks amid growing demand concerns. Tesla doubled U.S. discounts on key models including the Model 3 and Model Y EVs in an effort to boost sales.
CarMax (NYSE:KMX) also contributed to the wobble in consumer stocks after falling 3% as the automaker’s quarterly results fell short of Wall Street estimates.
Industrials were also down more than 1%, dragged lower by Boeing Co (NYSE:BA) and other airline stocks. Airlines including American Airlines (NASDAQ:AAL), Southwest Airlines (NYSE:LUV), and Delta Air Lines (NYSE:DAL) canceled hundreds of flights this week as winter storms are set to wreak havoc ahead of a busy Christmas weekend.
Sentiment on stocks was also soured by data showing the U.S. economy growth in the third quarter was revised higher, potentially encouraging the Fed to lean more hawkish on monetary policy.
The Commerce Department’s final reading of quarter gross domestic product for the third quarter showed the economy grew 3.2%, above the prior reading of 2.9% last month.
The job market, meanwhile, remained tight as initial jobless claims fell less than expected last week.
“The labor market remains very tight,” Jefferies said in a note. “We expect that it will soften eventually, but it is starting from a very significant position of strength, and it will take a little while longer for the cracks to form.”