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Bears Keep Market Trading Dangerous; Disney, Rivian Up on Reports

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Once again, market indices melted into the close Wednesday. Currently, we’re gearing up for a seventh-straight week in the red for the Dow, sixth straight for the Nasdaq and S&P 500. Right now, the tech-heavy Nasdaq is -30% from its all-time highs set in November of last year; the S&P is -18% from its January highs (-4.5% for the week so far) and the Dow is -7% in the past month alone.

Even worse, for the second-straight trading session, the Dow has gone on a huge rollercoaster ride: +423 points at session highs, only to come back down and close -326. Even the last hold-outs that had been untouched by this massive bear market — Apple (AAPL - Free Report) and Home Depot (HD - Free Report) — are down today: -5.2% and -2.8%, respectively. Nothing is safe and there is no bottom. At least that’s the current narrative.

Based on rising interest rates brought about to curb ongoing high inflation (CPI +8.3% year over year), forecasts are now for future quarterly earnings to head downward over the coming quarters, even into and through next year, depending who you listen to. Thus, lowered earnings is leading to the recalibration of valuations — not just in Tech but in all sectors — also downward. Ergo this bear market, whose falling knife has been bloodying fingers for the past several weeks.

The Walt Disney Co. (DIS - Free Report) saw its late-trading fortunes improve, even after it missed on both top and bottom lines on its fiscal Q2 after the close. Shares were up +3% initially and +6% before ebbing back a bit: earnings of $1.08 per share missed the $1.20 in the Zacks estimate, although a 43-cent one-time hit per share took the company’s beat to a loss. Revenues of $19.25 billion came in shy of the $20.25 billion expected — again on the $1 billion charge regarding to a termination of a license agreement.

Disney+ subscriptions did better than expected: 137.7 million versus 135 million analysts were looking for, while its Parks segment brought in $6.7 billion versus the $6.3 billion consensus estimate. The company cited both higher volumes and increased guest spending — demonstrating that another strongly branded company was successfully able to pass along higher expenses to its customer base. For more on DIS’ earnings, click here.

Rivian (RIVN - Free Report) shares are doing even better after the close, after its Q1 loss per share was slimmer than expected — -$1.43 versus -$1.50 in the Zacks consensus — while revenues came in well short of expectations: $95 million versus the $113.6 million analysts were expecting. Yet the production outlook of 25K vehicles generated in 2022 remains unchanged, signaling its medium-term expectations are still intact. After all, car companies’ business is to sell cars; it’s time for Rivian to deliver some EVs. Shares have ramped up +12% in late trading, but are still down more than -60% year to date.

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