Q3 results for AT&T and Verizon
On October 24, AT&T (T) reported weak third-quarter results, as the second-largest US (SPY) wireless carrier missed its earnings estimates. AT&T stock declined ~8.1% on Wednesday, its largest one-day decline in more than 16 years.
AT&T posted a loss of 232,000 postpaid subscribers in the quarter, after gaining in the last five quarters. Analysts had expected a gain of 89,000 postpaid customers. This loss was mainly due to a loss of 420,000 tablet customers in the quarter, partially offset by additions of 69,000 postpaid phone customers.
In contrast, Verizon (VZ) delivered strong third-quarter results on October 23. Verizon beat analysts’ estimates on earnings and revenues, as the company focused on growing its phone subscriber base. Verizon stock gained 0.37% yesterday.
Global concerns impacting stocks
On October 24, all the broader market indexes fell significantly due to global market worries. The markets experienced the worst single-day decline since 2011. On Wednesday, NASDAQ’s drop of 4.4%—its largest single-day decline since August 2011—erased ~$524.0 billion in market capitalization. The Dow Jones Industrial Average fell 2.4%, while the S&P 500 lost 3.09%.
Industrial behemoths Caterpillar (CAT) and 3M (MMM) have also hinted at concerns over economic growth. Weak manufacturing numbers in Europe due to a slump in US home sales weighed on investor sentiment. Also, the growing international pressure on Saudi Arabia over the death of journalist Jamal Khashoggi also pressured investor sentiment.
Rising interest rates and the ongoing trade war have increased borrowing costs and made investors jittery. Oil prices also fell amid global growth. The recent rash of suspected bombs mailed to high-profile Democrats and news media have also increased general tensions.
Stock price movement
The broader market indexes have been declining since the beginning of October. In October so far, the Dow Jones has plunged 7.1%, the NASDAQ Composite has fallen 11.7%, and the S&P 500 has dropped 8.8%. AT&T declined 8.3% in the month through October 24, and Verizon gained 8.8% in the same period.