Intel Dives After Announcing Layoffs To Cut Costs
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Key Takeaways
- The S&P 500 plunged 1.8% on Friday, Aug. 2, 2024, as an unexpected uptick in the unemployment rate added to concerns about a possible economic slowdown.
- Intel shares plunged after the chipmaker reported a wider-than-expected quarterly loss and announced layoffs to cut costs.
- Clorox shares moved higher after the company topped profit forecasts, with a streamlined operating model helping drive gross margin expansion.
Major U.S. equities indexes tumbled Friday following the release of the latest U.S. labor market report, which revealed fewer-than-expected job additions in July and a jump in the unemployment rate to its highest level since October 2021.
The S&P 500 lost 1.8% in the week’s final trading session. The Nasdaq plunged 2.4%, while the Dow closed the day 1.5% lower.
Intel (INTC) shares posted the sharpest drop of any S&P 500 constituent, plummeting 26.1% after the chipmaker reported a wider-than-expected quarterly loss and announced layoffs to cut costs. The semiconductor giant said gross margin headwinds related to the development of its artificial intelligence (AI) computer product hurt its results.
The downdraft in the semiconductor industry was not confined to Intel stock. Shares of Microchip Technology (MCHP) sank 10.6% after the company issued a lackluster sales and profit forecast for the current quarter. The chipmaker cited macroeconomic headwinds, particularly softness in U.S. and European industrial and automotive markets, for the unfavorable outlook.
Prudential Financial (PRU) shares fell 10% following mixed second-quarter financial results. Although total revenue slightly topped consensus forecasts, the insurer’s adjusted operating income fell short of estimates. A year-over-year decline in the firm’s international operating income dragged down its performance in the quarter, reflecting the impact of lower net investment spreads and depressed underwriting results.
Clorox (CLX) shares notched the strongest gains in the S&P 500, jumping 7.4% after the provider of consumer and professional cleaning products posted better-than-expected quarterly profits. The implementation of a streamlined operating model focused on cost reductions helped the company achieve gross margin expansion and drive earnings growth. Clorox also announced an agreement to sell its Better Health Vitamins business and touted its progress on recovering from a cyberattack that affected the company last year.
Shares of internet domain provider GoDaddy (GDDY) gained 7% after the company boosted its full-year revenue guidance. The company highlighted the progress of GoDaddy Airo, an AI-powered tool included with new domain purchases that can help customers with a variety of functions, including the creation of social media ads and email marketing campaigns.
Shares of MarketAxess Holdings (MKTX), which operates an electronic trading platform for fixed-income securities, added 6.1% ahead of the company’s second-quarter earnings report on Tuesday. In its most recent report, the firm reported better-than-expected profits, driven by record commission revenue from emerging markets, Eurobonds, and municipal bonds.
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