Tesla shares, Netflix dragged down S&P 500, Nasdaq

July 20 (Reuters) – The S&P 500 and Nasdaq pull back on Thursday after suggestions from Tesla’s CEO for further price cuts stoked investor fears. Netflix shares fell amid declining quarterly revenues.

Tesla CEO Elon Musk signaled on Wednesday that he was ready to lower electric vehicle prices again in “turbulent times” even as a price war with competitors is squeezing the company’s margins.

The automaker’s shares fell 6.6% at 5:50 p.m. Moscow time, despite the company’s quarterly profit beating forecasts.

“Markets had hoped that most of the price drop (for Tesla cars) happened in the first half of the year and hoped margins would start to pick up in the second half of the year, but this is now in doubt,” said City Index’s Joshua Warner.

Netflix fell 8.5% after the company reported second-quarter revenue that was slightly below expectations.

“Netflix stock has historically been driven less by fundamentals than by narrative and sentiment, but for those who pay attention to the fundamentals, one thing is clear: Netflix is ​​grossly overvalued and a very risky investment,” said David Trainer of New Constructs.

The Dow Jones rose 0.62% to 35,279.9, while the S&P 500 fell 0.39% to 4,548.29 and the Nasdaq lost 1.31% to 14,170.75.

Johnson & Johnson led the Dow Jones Index, rising 5.8% as the US drugmaker raised its 2023 profit forecast, betting on growth in its medical device business and demand for cancer drugs, most notably Darzalex.

United Airlines shares rose 1.8% on anticipation of higher full-year profits after the airline posted its highest-ever quarterly profits fueled by rising demand for international travel.

US-listed TSMC fell 4.6% as the Taiwanese chip maker predicted a 10% drop in sales this year on Thursday.

Total profits across all industries are expected to fall 8.2% in the second quarter, according to Refinitiv data released on Wednesday.

The original message in English is available under the code: (Bansari Mayur Kamdar and Johann M Cherian in Bangalore, translated by Tomasz Kanik. Editor Dmitry Antonov)


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