The S&P 500 index (SNPINDEX:^GSPC) closed down 10 points, or about 0.3%, on Oct. 27 as stocks diverged into two groups: the tech stocks that went higher, and everything else that fell. Both the tech and communications sectors gained today, while every other sector closed lower. In total, 381 of the 503 stocks in the index closed lower today. 

Today's biggest gainers -- no surprise -- were tech stocks. Xilinx (NASDAQ:XLNX) shares picked up 8.6% following the official announcement that Advanced Micro Devices (NASDAQ:AMD) was paying $35 billion to acquire its smaller rival. Shares of F5 Networks (NASDAQ:FFIV) gained 8.5% on earnings. 

Companies reporting earnings led the charge lower. Shares of Franklin Resources (NYSE:BEN) fell 13.6% after the company announced quarterly results that failed to meet expectations. Joining Franklin on the slide lower were Dexcom (NASDAQ:DXCM), Raytheon Technologies (NYSE:RTX), and Eli Lilly (NYSE:LLY), all down 7% or more. 

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Image source: Getty Images.

Big tech the lone bright spot

Xilinx shares gained on the announcement of the AMD deal, which will pay Xilinx investors 1.7234 AMD shares for each share of Xilinx they own, attaching a $35 billion value to the smaller company. The acquisition is expected to help AMD step up its game in the high-growth data center segment where Intel has a commanding presence.

F5 Networks shares gained following the company's fourth-quarter earnings report and earnings call. F5 reported strong growth in its burgeoning subscription software business, and CEO Frank Pelzer said software sales would grow 35% this year. This growth is helping the company transition away from a hardware and software sales model that's in decline, as more companies move to software-as-a-service

The biggest of the big tech stocks also gained today, with Apple (NASDAQ:AAPL)Amazon (NASDAQ:AMZN), and Microsoft (NASDAQ:MSFT) all posting modest gains ahead of earnings. Microsoft reported after market close, delivering some $14 billion in profits. Apple and Amazon are set to report later this week. Amazon also announced today that it would need to hire another 100,000 seasonal workers to support demand through the holiday shopping season. 

Earnings woes sent these stocks lower 

Recent earnings excitement has turned a bit negative, with the four worst-performing S&P stocks today all falling on earnings.

Franklin Resources

Franklin Resources shares declined sharply after it reported earnings of $0.56 per share, well below expectations, while investors also cast their doubts about the near-term prospects for the money manager and financial services company, which is still working through combining Legg Mason, which it recently acquired. 

Eli Lilly

Pharma giant Eli Lilly shares also fell today following an underwhelming (at least for Wall Street's expectations) quarter. Revenue was up 5% to $5.7 billion, but analysts wanted to see $5.9 billion, and $1.54 adjusted earnings per share didn't meet the $1.71 per share Wall Street was looking for. In short, today's decline is the result of Wall Street trying to gild the lily. Today's sell-off could represent an opportunity to buy shares of a quality company at a respectable price. 

Raytheon

Defense and aerospace giant Raytheon shares fell as the company's commercial aviation business continues to struggle under the weight of the coronavirus pandemic. The company said it would cut almost 20,000 employees and contractors, mostly in its commercial aviation-focused units. It will also cut more than 20% of its existing infrastructure as part of its cost-cutting efforts. The depth of the cuts, both to headcount and the company's facilities, indicates Raytheon management expects commercial aviation will struggle to return to normal for a number of years. 

Dexcom

The glucose monitoring devices company reported 26% revenue growth, a solid increase in operating income, and set guidance for 29% growth this fiscal year. By most accounts that's a solid result, but it wasn't released until after market close today. The company pre-released third-quarter revenue results on Oct. 26, while also announcing the retirement of Chief Commercial Officer Rick Doubleday, who joined Dexcom in 2009 and played a major role in building what is on track to be a $2 billion sales business this year. 

Looking ahead: Earnings season heating up

More than 100 S&P 500 companies are set to report earnings before the end of the week. This includes six of the eight biggest companies, with Alphabet (NASDAQ:GOOGL)(NASDAQ:GOOG) and Facebook (NASDAQ:FB) reporting Wednesday, and Visa (NYSE:V) reporting tomorrow along with Mastercard (NYSE:MA)

Investors should expect this massive dump of new information -- and traders looking to make money before and after the reports -- to add to the recent volatility. What happens over the next few days is impossible to predict. But looking at the bigger picture, and further into the future, I think it's a reasonable conclusion that investors can still count on stocks as the best way to create wealth over the long term.