Investors nearing the end of a volatile week on Wall Street witnessed a fall in benchmark equity averages on Friday.
At the time of writing, the Dow Jones Industrial Average fell 0.6%, losing 272 points, while the S&P 500 also fell 0.4%. The Nasdaq Composite dropped slightly by 0.2%.
“This has been an unusual week for markets,” said David Morrison, senior market analyst at Trade Nation.
Equities and bonds were closed on Monday for Presidents’ Day. Then the next two sessions were extremely slow, although this didn’t stop the S&P 500 inching, almost unnoticed, to two successive record closes.
The Dow was negatively impacted by UnitedHealth’s stock price, which fell over 10% following a Wall Street Journal report about a Justice Department investigation into the insurer.
This decline put the stock on track for its worst performance since March 2020.
Thursday’s session was a losing one for traders, with the Dow shedding 450 points.
“All four major US stock indices sold off sharply, although they managed to recover from their lows before the close. Nevertheless, all suffered losses, this time led by the Dow, which closed 1% lower, closely followed by the Russell 2000 which lost 0.9%,” Morrison added.
Investors attributed the market sell-off to a number of factors, including lingering inflationary concerns, Walmart’s 6.5% dip, and declines in Palantir shares.
Celsius Holdings surges
Celsius Holdings, an energy drink manufacturer, saw its stock price surge by over 31% following the release of its fourth-quarter earnings report.
The company exceeded analysts’ expectations in terms of both earnings per share (EPS) and revenue.
Celsius reported an adjusted EPS of 14 cents, surpassing the consensus estimate of 11 cents per share.
Additionally, the company generated $332 million in revenue, exceeding the projected $326 million by LSEG.
The significant jump in stock price can also be attributed to Celsius’s announcement of a strategic acquisition.
The company entered into an agreement to acquire Alani Nutrition, another player in the health and wellness beverage market.
The deal involves a combination of cash and stock, and it is expected to further strengthen Celsius’s position in the industry.
UNH’s stock slumps
UNH stock fell by approximately 9% on Friday following a Wall Street Journal report that the Justice Department is investigating the insurer’s Medicare billing practices.
Sources familiar with the matter revealed that the investigation is focused on UnitedHealth’s practice of recording diagnoses that can result in additional payments on Medicare Advantage plans, according to the report.
Meanwhile, Block, a prominent fintech company, experienced a 6% decline in its stock value following the release of its fourth-quarter financial results.
The company reported adjusted earnings of 71 cents per share, accompanied by total revenue of $6.03 billion.
This earnings report seemingly fell short of investor expectations, leading to the subsequent drop in stock price.
Dropbox falls over 11%
Dropbox experienced a decline in shares exceeding 11% due to their mixed quarterly results.
While the company’s non-GAAP gross margin of 83.1% in the fourth quarter aligned with analysts’ expectations according to StreetAccount, their adjusted earnings and revenue for the same period surpassed consensus forecasts.
This suggested that despite the drop in share value, Dropbox’s overall financial performance was positive, with stronger than anticipated earnings and revenue.
The mixed results likely stem from specific areas of underperformance that impacted investor confidence, leading to a decrease in share price.
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