4:05 p.m .: Stocks slide into negative territory
US stocks were in the red for a second straight day after a steady stream of earnings contrasted against a backdrop of high inflation and further Fed policy tightening.
The S&P 500 closed lower at 4,394 points for a loss of 1.5%, and the Dow fell 1.1% to 34,793 points. Meanwhile, the Nasdaq lost the most percentage at 2.1% to end at 13,175.
1 p.m.: US stocks in the red
U.S. stocks fell in afternoon trading as investors continued to watch a steady stream of corporate earnings results amid tightening U.S. Federal Reserve policy.
The Dow Jones Industrial Average plunged into the red, while the Nasdaq Composite Index fell 0.8%, weighed down by a drop in Netflix shares. The S&P 500 also fell 0.4%.
So far, about 80% of S&P 500 companies that have reported results have exceeded analysts’ expectations, according to FactSet.
However, fund managers are bracing for the Fed to hike rates quickly this year to stifle inflation at its highest pace in decades. This change hurts government bonds and markets that have benefited from years of accommodative monetary policy.
9:55 a.m.: US stocks start the day higher
U.S. indexes started in the green on Thursday, with the Nasdaq also recovering from weakness after Netflix shares fell after disappointing first-quarter subscriber numbers.
In New York, the Dow Jones Industrial Average gained 290 points, or 0.83%, in early trading to 35,451, while the broader S&P 500 added 51 points, or 1.15%, to 4,510.
The tech-laden Nasdaq rose 254 points, or 1.89%, to 14,707.
After Wednesday’s close, Tesla Inc (NASDAQ:TSLA) reported another record quarter, sending its shares up more than 11%. Shares of United Airlines Holdings Inc. also rose more than 11% after forecasting a 2022 profit as the airline industry normalizes in the wake of the coronavirus (COVID-19).
“With earnings season in full swing and fully focused, investors are reacting to the differing fortunes of companies struggling with inflationary pressures and a changing interest rate environment,” commented Richard Hunter, head of markets at Interactive Investor. The Federal Reserve also remains central to current investor caution. The Beige Book’s summary of recent economic conditions indicated a moderate recovery in the economy, despite pressures from high inflation and labor shortages in many sectors.”
6:30 am: US stocks set to open higher
U.S. stocks are set to open slightly higher on Thursday ahead of further U.S. corporate earnings releases, though the mood will remain cautious as investors brace for further market volatility, exacerbated by Russia’s testing of a new nuclear-capable intercontinental ballistic missile.
Analysts said investors will also be closely watching comments from Federal Reserve Chairman Jerome Powell, who is due to appear at a panel discussion on the global economy hosted by the International Monetary Fund alongside the President of the European Central Bank, Christine Lagarde, and the Managing Director of the IMF. Kristalina Georgieva at 1 p.m. ET.
Futures on the Dow Jones Industrial Average gained 0.58% in pre-market trading Thursday, while those on the broader S&P 500 index rose 0.73%. Contracts for the tech-heavy Nasdaq 100 rose 1.03%, rebounding from losses triggered by Netflix’s plunge yesterday.
In after-hours trading on Wednesday, shares of Tesla Inc (NASDAQ:TSLA) rose 5% after ignoring supply chain issues and pandemic restrictions to report net profit up seven times from 3, US$3 billion in the first quarter and set a higher production target for the year.
On the contrary, shares of the world’s largest streaming company Netflix Inc (NASDAQ:NFLX) lost more than 35% on Wednesday after its subscriber numbers unexpectedly fell in the first quarter.
Investors have been eager to see which companies have been able to weather runaway inflation and whether U.S. households can continue to balance their budgets in the face of soaring prices since the disappointing results from the big banks, analysts said.
“Even though the 35% selloff (in Netflix stock) sounds gigantic, we’ve already seen a 20% to 30% drop or jump after the big tech headlines,” said Ipek Ozkardeskaya, senior analyst at Swissquote. “The scale of the reaction hints at how prices are (inflated) due to cheap liquidity and easy financial conditions in the pandemic months and potential losses for other tech companies following earnings announcements. weak in the coming weeks.
With the Federal Reserve expected to act relatively quickly to bring inflation under control, the outlook for tech companies will remain unfavorable, she added.
Ozkardeskaya said while there hasn’t been a major shift of funds from tech to safe-haven stocks, companies that aren’t able to pass the cost of higher prices onto customers are likely to suffer more. than those who can.
Additionally, “escalating tensions (in the Russian-Ukrainian conflict) could hit sentiment after Russia tested a new intercontinental missile that could carry multiple nuclear warheads,” she noted.
Elsewhere, oil prices were a bit higher, reflecting supply-side concerns as Russian oil production shows signs of falling. Benchmark Brent futures rose 1.01% to $107.88 a barrel, while WTI rose 0.71% to $102.92 a barrel.
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