Stocks suffered a late-hour sell-off as most indexes ended Thursday's trading at or near session lows.
The Nasdaq composite dropped more than 0.6%, sinking below its 50-day moving average, while the Dow Jones industrials and S&P 500 fell nearly 0.2% and 0.3%, respectively. However, Tesla Motors (TSLA) gained nearly 1% to 204.01 after a surprising third-quarter profit of 71 cents a share, shooting well past estimates. Sales soared 145% to $2.3 billion.
The stock was up as high as 213.70, spending time briefly above its 200-day moving average.
Small caps sharply underperformed. The Russell 2000 lost nearly 1.1%, following Wednesday's 0.9% slide.
Volume grew on both main exchanges, according to preliminary data, indicating institutional selling was heavy amid a further strengthening of the U.S. dollar and another rise in long-term interest rates. The 10-year U.S. Treasury bond yield hit 1.79%, near its mid-October high of 1.80%.
Some leading stocks in the medical and consumer sectors got hammered following their quarterly results, including heart pump device firm Abiomed (ABMD) and auto parts retailer O'Reilly Automotive (ORLY).
Abiomed reported fiscal second-quarter earnings of 20 cents a share, up 18% but well below the Street's consensus view, as profit margins declined year over year. Revenue grew 35% to $103 million.
O'Reilly tanked nearly 9% to 253 in massive volume and dived below its long-term 200-day moving average. The chain reported Q3 earnings of 2.90 a share, up 15% but slightly below Wall Street's consensus view. It also marked a second quarter in a row of slowing EPS growth. Sales rose 7%, matching its Q2 increase.
In July, O'Reilly broke out and cleared a 281.75 handle entry point, but gained less than 4% before backtracking. Since then, the stock's Relative Strength Rating has also faded to a 58 out of a maximum 99 as seen in IBD Stock Checkup. Meanwhile, a poor Accumulation/Distribution Rating of D+ indicates net selling by institutional investors.
After the close, internet giants Alphabet (GOOGL) and Amazon.com (AMZN) both reported robust Q3 results but were volatile in after-hours trading. The former was up roughly 1% while the latter sank more than 6%. Both megacap techs finished the regular session with piecemeal losses.
In after-hours trading, Amazon shares dropped to as low as 779, significantly below its 50-day moving average near 799. However, shares still hold a stout gain of nearly 30% since the stock moved past a 603.34 buy point in a four-month cup with handle on April 13.
Google operator Alphabet notched a 20% rise in revenue, exceeding its 13% gain in the year-ago quarter; excluding currency impact, revenue climbed 23%. Non-GAAP earnings jumped 23% to $9.06 a share. CFO Ruth Porat noted in a new release that mobile search and video services "are powering our core advertising business."
Alphabet's net margin rose to 28.2%, up 90 basis points vs. the year-ago period.
Amazon, meanwhile, posted a 49% rise in operating cash flow to $14.6 billion in the trailing 12 months, and free cash flow grew to $8.6 billion vs. $5.4 billion for the trailing 12 months ended in September 2015. Net sales rose 29% to $32.7 billion while earnings more than tripled to 52 cents a share.
CEO Jeff Bezos noted in a news release that the Alexa computerized assistant "may be Amazon's most loved invention yet — literally — with over 250,000 marriage proposals from customers and counting."
The company noted that it expects to hire 120,000 workers in seasonal positions for the upcoming holiday season. Last year, it transitioned more than 14,000 such positions into regular, full-time roles after the holidays. Amazon expects to boost that number this year.
On the Amazon Web Services side, Amazon expended into the Ohio region and now operates 38 "Availability Zones" across 14 technology infrastructure regions globally. It plans to open nine more zones in four regions (Canada, U.K., France and a second region in China) in the coming months.
Net margin at Amazon improved sharply to 0.8% vs. 0.3% in the year-ago quarter.
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