2023-04-19 22:40:10
(New York = Yonhap News) Correspondent Yoon Young-sook of Yonhap Infomax = The New York stock market showed a mixed trend as investors grew wary of companies’ performance.
At the New York Stock Exchange (NYSE) on the 19th (US Eastern time), the Dow Jones 30 Industrial Average closed at 33,897.01, down 79.62 points (0.23%) from the battlefield.
The Standard & Poor’s (S&P) 500 index closed at 4,154.52, down 0.35 points (0.01%) from the battlefield, and the Nasdaq index closed at 12,157.23, up 3.81 points (0.03%) from the battlefield.
Investors are looking for direction by keeping an eye on mixed corporate performance, the Federal Reserve’s Beige Book, and the possibility of further rate hikes.
In particular, the news that loans decreased with the announcement of the Beige Book eased concerns regarding tightening, which partially reversed the bearish atmosphere at the beginning of the market.
Netflix, which announced earnings following the market close the day before, fell more than 3% on the news that new subscribers and sales in the first quarter were below expectations. Netflix decided to postpone the account sharing fee-for-service until the second quarter.
Morgan Stanley delivered better-than-expected results. However, the share price rose only 0.7% when it was pointed out that the investment banking and asset management divisions’ profit rates were below expectations.
Shares of United Airlines jumped more than 7% on news that quarterly losses were smaller than expected. The share price of Western Alliance Bank, a regional bank, soared 24 percent on the news that deposits increased significantly in April despite sluggish earnings. Local banking stocks also soared. Shares of First Republic Bank and Pac West Bank rose more than 12% and 10%, respectively.
Shares of insurer Travelers rose more than 6% on the news that quarterly results were better than expected.
On this day, following the close of the market, Tesla and IBM announced their earnings. Tesla shares are down more than 3% in following-hours trading following the market close, even though sales and net income were largely in line with expectations. Investors seem to have been disappointed by the lower-than-expected gross margin due to aggressive price cuts. IBM shares are up more than 3% as earnings beat expectations.
Companies listed on the S&P 500 in the first quarter are expected to see a 6.5% drop in net income from the same period last year, according to FactSet. This is the largest decline since the second quarter of 2020.
So far, regarding 9% of companies listed on the S&P 500 have reported earnings, and 84% of them have reported earnings that exceeded expectations.
The earnings of companies released this week are also generally better than expected, but the S&P 500 index has been struggling to break away from the 3,800-4,200 range it has maintained over the past five months.
On this day, the volatility index (VIX) fell further from the 16 point level, once more breaking the lowest level since January 2022. Investors are betting that there will be no significant market movement over the next month.
Growing market uncertainty over the Fed’s post-May policy is also limiting the share price rebound.
Markets are expecting the Fed to raise rates by 0.25 percentage points in May, but they are less confident than ever regarding the possibility of a further rate cut.
The UK’s consumer price index (CPI) rose 10.1 per cent in March from the same month last year, far exceeding expectations, raising concerns regarding central bank tightening. News of soaring inflation in the UK caused the UK 2-year gilt yield to rise by more than 10 basis points, which helped push up US Treasury yields.
In its Beige Book, an economic assessment report released on the same day, the Fed said that “demand for bank loans and consumer and business loans has declined overall” following the Silicon Valley Bank (SVB) collapse last month.
The San Francisco area also reported “declining residential and commercial real estate activity, and a significant decline in lending activity.” However, it diagnosed that “overall economic activity has changed little in recent weeks.”
Within the S&P 500 index, stocks related to telecommunications, materials, energy, and technology fell, while stocks related to utilities, real estate, health, and finance rose.
The stock price of Bed Bath & Beyond, which continues to be concerned regarding bankruptcy, soared more than 30% for no apparent reason. The company’s stock has plummeted more than 80% this year.
Tesla’s share price fell by regarding 2% on the news that it had cut the price of some models in the US once more ahead of the announcement of earnings in the regular market. Chinese EV-related stocks listed in New York also showed weakness. This is because of concerns that price cut competition may intensify further. Shares of Nio and Xiaopeng fell more than 7% and 12%, respectively.
NYSE analysts said investors remain vigilant regarding the possibility of a Fed-induced recession, even as earnings beat expectations.
JPMorgan’s trading desk told CNBC that “this risk-averse stance appears to be consistent with heightened recession risks, potentially allowing the central bank to induce (recession).”
“The Beige Book is consistent with the fact that the US economy is slowing growth due to Fed tightening,” PNC Financial economist Gus Faucher told MarketWatch.
According to the Chicago Mercantile Exchange (CME) FedWatch, the probability of the Fed raising rates by 0.25 percentage points at the close of the Federal Funds (FF) interest rate futures market at its May meeting reached 86.7%. The possibility of interest rate freeze recorded 13.3%.
The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) recorded 16.46, down 0.37 points (2.20%) from the battlefield.
ysyoon@yna.co.kr
(end)
This article was serviced at 05:39 on the Infomax financial information terminal.
Send SNS articles
1681945847
#York #stock #market #mixed #performance #boundary.. #Dow #close
