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S&P 500 snaps 356-session run without a 2% decline

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Worst single-day performance for Nasdaq since October 2022

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Tesla posts largest daily fall since Sept. 2020 on

earnings

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Indexes down: Dow 1.25%, S&P 2.31%, Nasdaq 3.64%

(Updates with closing prices)

By David French

July 24 (Reuters) -

The S&P 500 and Nasdaq ended at multi-week lows on

Wednesday, with the S&P snapping one of its longest streaks

without a daily decline of more than 2%, as lackluster Alphabet

and Tesla earnings undermined investor confidence in megacap

names.

As the first of the Magnificent Seven stocks reported

quarterly numbers, investors had been awaiting new data to see

if lofty valuations were justified. With these seven companies

having such sway over markets, their performance was bound to

have wide repercussions.

Investor reactions to the numbers contributed to the

benchmark S&P 500 posting its worst one-day performance

since December 2022. Its 2.3% fall marked the first time it had

closed more than 2% off in 356 sessions, its longest streak

since 2007.

The Nasdaq Composite was also beaten down,

posting its largest single-day percentage decline since October

2022 to finish at its lowest point since June 10. Meanwhile, the

Dow Jones Industrial Average closed below 40,000 points

for the first time in two weeks.

Dave Grecsek, managing director in investment strategy and

research at Aspiriant, noted that the upward momentum of the

first two weeks of July in equity markets had now disappeared

over the last week.

"There's a little bit of profit-taking, and then people are

a little apprehensive about earnings announcements upcoming," he

said.

Tesla weighed heavily on Wednesday, slumping 12.3%

in its worst single-day fall since September 2020. This came

after the electric-vehicle maker reported its lowest profit

margin in more than five years and missed second-quarter

earnings estimates.

Google parent Alphabet dropped 5%, to its worst

finish since May 31, despite a second-quarter earnings beat, as

investors focused on an advertising-growth slowdown and the

company flagged high capital expenses for the year.

Tesla and Alphabet dragged the S&P 500 Communication

Services and Consumer Discretionary sector

indexes down by 3.8% and 3.9% respectively, with the Consumer

Discretionary index posting its largest single-day decline since

September 2022. Information Technology was the weakest

performer of the 11 S&P sectors though, and its 4.1% decline was

its largest daily drop since October 2022.

Alphabet's losses underscored the high earnings bar for the

so-called Magnificent Seven, a set of megacap tech stocks that

have notched double- and triple-digit percentage gains in 2024,

riding on optimism around AI adoption and expectations of an

early start to the Federal Reserve's interest-rate cuts.

"When you put everything in an earnings context, you can

really understand why those Mag 7 stocks have been performing so

great because the earnings have been there," said Grecsek.

Any doubts, however, about the stocks meeting expectations

will induce selling pressure. The other megacaps, Apple ( AAPL )

, Microsoft ( MSFT ), Amazon.com ( AMZN ), Meta

Platforms ( META ) and Nvidia ( NVDA ), all closed down between

2.9% and 6.8%.

Meanwhile, the blue-chip Dow did not escape the

negativity. Visa was among the stocks that weighed on it,

dropping 4% after its third-quarter revenue growth fell short of

expectations.

As stocks tumbled, the Cboe Volatility Index - known

as Wall Street's fear gauge - closed at 18.04, the highest since

April 19.

The S&P 500 lost 128.61 points, or 2.31%, to 5,427.13

points, while the Nasdaq lost 654.94 points, or 3.64%, to

17,342.41. The Dow Jones Industrial Average fell 504.22 points,

or 1.25%, to 39,853.87.

Among others, AT&T ( T ) gained 5.2% after beating forecasts

for wireless subscriber additions, while solar inverter maker

Enphase Energy ( ENPH ) jumped 12.8% after reporting a

second-quarter operating profit beat.

Meanwhile, Roper Technologies ( ROP ) dropped 7.4% after it

signaled third-quarter profit would fall below estimates. Boston

Scientific ( BSX ) traded 1.1% down, despite lifting its 2024

profit target and beating second-quarter earnings estimates.

Volume on U.S. exchanges was 12.94 billion shares, compared

with the 11.48-billion average for the full session over the

last 20 trading days.