Morning Brief

Amazon earnings miss puts further pressure on the Nasdaq

Key Points


Wall Street was under pressure, especially Nasdaq futures, which were feeling the roughly 3 percent drop in Amazon (AMZN) on an earnings miss. On Thursday, the Nasdaq saw a big downside reversal. The S&P 500 was slightly lower, but the Dow hit another record high. (CNBC)

Dow components Exxon Mobil (XOM), Chevron (CVX), and Merck (MRK) lead this morning's earnings list. American Airlines (AAL) and Baker Hughes (BHGE) are also out with quarterly results. There are no major companies set to issue earnings after the bell. (CNBC)

The first reading of second quarter GDP is out at 8:30 a.m. ET, with forecasts calling for a 2.7 percent annual growth rate following a 1.4 percent advance for the first quarter. The University of Michigan's final July consumer sentiment index is released at 10 a.m. ET. (CNBC)

With two trading days left in July, the Dow and S&P 500 were both tracking 2 percent gains and their best months since February. The Nasdaq's July advance so far was nearly double that and the index was poised for its best month since January. (CNBC)


Amazon (AMZN) warned about a possible operating loss in its third quarter after reporting second-quarter earnings well below estimates. However, revenue exceeded expectations. Amazon invested heavily in growth areas such as video content. (CNBC)

* Amazon Web Services revenue grows 42% to $4.10 billion (CNBC)
* Amazon's first foray into Southeast Asia hits a roadblock (CNBC)

The premarket slide in shares of Amazon on Friday knocks Jeff Bezos, founder of the e-commerce and cloud computing giant, from the top of the world's rich list. Based on Wednesday's close, Bezos briefly ascended to No. 1 with a fortune over $90 billion. (CNBC)

Starbucks (SBUX) shares were about 6 percent lower in premarket trading after the coffee giant matched forecasts with fiscal third-quarter earnings but fell short on revenue. Starbucks also issued a cautious outlook and said it would shut down all 379 of its Teavana stores. (CNBC)


In a dramatic early Friday morning floor vote, the Senate blocked the latest Republican attempt to dismantle Obamacare, the so-called "skinny repeal" measure. Three GOP defections, including John McCain, sank the measure 49 to 51. (CNBC)

* The GOP tax reform effort just won key support (CNBC)
* Retailers cheer the death of the border adjustment tax (CNBC)

Anthony Scaramucci, the new White House communications director, unleashed a profanity-filled tirade against White House chief of staff Reince Priebus and chief strategist Steve Bannon in an interview with the New Yorker.

House Judiciary Committee Republicans are calling for another special counsel, in addition to the one leading the federal Russian investigation. They want a second counsel to look into Hillary Clinton, James Comey, and Loretta Lynch. (CNBC)

* Congress sends Trump sanctions on Russia to sign or veto (NBC News)
* Russia hits back over sanctions, orders US diplomats to leave (Reuters)

Meg Whitman dismissed speculation she may become CEO of Uber, a role co-founder of the ride-hailing service Travis Kalanick vacated last month under pressure. Whitman, currently chief executive of Hewlett Packard Enterprise (HPE), said she does not plan to move. (CNBC)

* Uber Approaches outgoing GE CEO Jeff Immelt (WSJ)

Tesla's Elon Musk is set to take the stage tonight at an event to showcase the first deliveries of the Model 3 sedan that he hopes will help transform his niche electric automaker into a more mass-market force. (WSJ)

The National Highway Traffic Safety Administration is expanding an investigation into 1.33 million Ford Explorer SUVs over reports of exhaust odors inside the vehicles and exposure to carbon monoxide that may be linked to crashes and injuries. (Reuters)

* EPA approves long-awaited fix for VW diesel cars (USA Today)

Wells Fargo (WFC) will reimburse about $80 million to 570,000 customers who were wrongly charged for car loan insurance. It's another black eye for the bank, which has been working to restore its reputation after a massive fake accounts scandal. (CNBC)


Dow stock Intel (INTC) beat estimates by 4 cents with adjusted quarterly profit of 72 cents per share. Revenue also beat. The chipmaker raised its full-year revenue outlook on optimism for its PC business.

Expedia (EXPE) fell 4 cents shy of estimates, reporting adjusted quarterly profit of 89 cents per share. Gross bookings, a key metric for the travel website operator, also fell short. However, revenue beat expectations.

Electronic Arts (EA) posted adjusted quarterly profit of 36 cents per share, beating estimates. Revenue also beat. But shares of the video game maker were pressured in the premarket after hitting a record high Thursday.

Mattel (MAT) lost 14 cents per share for its latest quarter, wider than the 9 cents forecast by analysts. The toy maker also saw revenue fall short as global sales of its flagship Barbie brand fell 5 percent.

First Solar (FSLR) reported adjusted quarterly profit of 64 cents per share, well above the 4 cent estimate. Revenue also exceeded forecasts by a wide margin, while issuing an upbeat forecast for the full year.

Boston Beer (SAM) earned $2.35 per share for the second quarter, well above estimates. The brewer of Sam Adams also reported revenue above forecasts and increased revenue per barrel produced.

Align Technology (ALGN) reported a second quarter profit of 85 cents per share, 12 cents above estimates, with revenue also beating forecasts. The maker of the Invisalign braces also delivered an upbeat outlook.