Dow Jones Leads Weekly Gains As Tesla, Netflix Sell-Offs Dent Nasdaq; Big Banks Show Resilience To Volatility

The star of the week is the blue-chip Dow Jones, which marked a winning streak of 10 consecutive sessions through Friday, riding high on positive quarterly results from many high-profile defensive stocks. The industrial average is up 2.1% on a weekly basis. The last time the index had a winning streak this long was 2017.

The tech sector is not telling the same success story, and the Nasdaq Composite felt the blow of disappointing results from companies like Netflix NFLX and Tesla TSLA. The index is down 0.42% on a weekly basis.

Tesla CEO Elon Musk lost almost $20 billion dollars on Thursday as investors rushed to dump the carmaker's stock. Shares were down almost 10% on Thursday and are closing the week on a negative note. The company lost over $90 billion in value despite presenting successful quarterly results that surpassed analyst expectations and featured an all-time high quarterly revenue figure. 

Analysts blamed Musk's poorly chosen focus points during the conference call. The CEO spoke about possible price cuts for Tesla vehicles and failed to provide specific details over key future developments, such as a launch date for the company's long-awaited Cybertruck. Musk also mentioned likely cuts in production output due to summer factory shutdowns.

Netflix posted better-than-expected earnings per share but missed estimates on revenue. Analysts praised the company's recent crackdown on account sharing, which resulted in almost 6 million new accounts being opened on the platform after more than 100 million people were found to be sharing their password with persons outside their household. Netflix shares had lost almost 4% on the week at the time of writing. In spite of the sell-off, most analysts raised their price targets for the streaming stock. 

Retail sales across the U.S. continued to grow in June, yet at a slower pace than before. Data from the U.S. Census Bureau showed that retail sales were up 0.2% over May, showing healthy spending power across the country.

Good quarterly results from major banks helped maintain a positive sentiment across the market as the sector shows resilience in a volatile macroeconomic environment. Bank of America BAC shares are up 8.2% weekly as the company's results beat consensus estimates from analysts. Revenues climbed to $25.2 billion this quarter. 

Morgan Stanley MS shares are up 9.8% on the week after also beating estimates. Charles Schwab SCHW was the winner of the gang, with stock climbing 13.5% on a weekly basis. The bank had its best trading session in three years on Tuesday, climbing 12% in one day.

Apple AAPL shares rose on Wednesday after it became known the company is working on its own AI engine that could compete with OpenAI's ChatGPT and Google's Bard.

ExxonMobil XOM surprised investors by announcing plans to begin mining for lithium, a key component in electric car batteries, in Arkansas. The event marks a clear strategy of diversification into the EV industry for the oil giant.

Climate instability continues to take its toll on corporate America. This week, a production plant for pharma giant Pfizer, Inc. PFE suffered heavy damage from a tornado in Rocky Mount, North Carolina.

A hurdle was removed this week in the high-stakes $69 billion merger of Microsoft with gaming giant Activision Blizzard after the Federal Trade Commission agreed to pause an antitrust lawsuit that was blocking what could become the largest-ever deal in the gaming industry.

What To Watch: Tech giants will lead the earnings calendar next week, with results from Microsoft MSFT and Alphabet GOOG on Tuesday, Meta META on Wednesday and Amazon AMZN on Thursday.

Several other large-cap companies will release their results. Visa V, Unilever UL, Verizon VZ , General Motors GM and 3M MMM will post on Tuesday; Coca-Cola KO , Union Pacific UNP, Boeing BA and AT&T T on Wednesday; Mastercard MA, Intel INTC AbbVie ABBV, McDonalds MCD, Shell SHEL, Comcast CMCSA, T-Mobile TMUS and Mondelez MDLZ on Thursday; and Exxon, Procter And Gamble PG , Chevron CVX, Astra-Zeneca AZN and Colgate-Palmolive CL on Friday.

A meeting of the Federal Open Market Committee will conclude with a decision on Wednesday to either raise interest rates or continue with the pause on hikes from the Fed's June meeting. Positive inflation data from last week will likely influence the decision, which could take the federal funds rate to its highest level in 22 years.

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