Both the S&P 500 and Dow Jones Industrial Average closed off Wednesday’s record highs. The Nasdaq composite sank 16.03, or 0.3 percent, to 5,073.90.
Advertisement
Still, second-quarter earnings for S&P 500 companies, which started reporting in earnest this week, are now expected to decline by only 3 per cent, less severe than the 4.5 percent drop estimated at the start of the month, according to Thomson Reuters.
The stock was the biggest loser on the Dow and the biggest drag on the S&P 500. While earnings beat on estimates, revenues for the company’s data centre and Internet of Things operations came in well below analysts’ projections. The producer of natural gas and oil also raised its forecast for production this year, and its stock jumped $1.26, or 9.5 percent, to $14.47.
“We’ve had a major rise in global equities for nearly a month, this has been accelerated during the earnings season”, said Christian Gattiker, head of research at Julius Baer Group in Zurich. Union Pacific dropped 3.4 percent after the No. 1 USA railroad posted a lower quarterly net profit, hurt by slumping freight volumes. Utilities rose 1.2% and telecommunications services increased 1%. They and other dividend-paying stocks have been at the forefront of the stock market’s rise this year, as investors searched for steadier returns and anything that produces income given how low bond yields are.
NOT SO SWEET: Honeywell International fell $2.99, or 2.5%, to $115.67 to lead industrial stocks lower. The company reported stronger earnings than analyst expected, but it also lowered its forecast for full-year sales. The health care giant is one of the 30 stocks in the Dow Jones industrial average, and its move helped the Dow notch a milder loss than the S&P 500. It led a 0.42 percent gain in tech stocks. The S&P 500 has yet to have a day where it moved by 1 percent, up or down, in the last two weeks. And investors quickly snapped up stocks the following day.
ANALYST’S TAKE: “I think people are a little more sensitized, where any tick lower in the market creates this “buy on the dip” mentality”, said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management.
Japan’s economy is barely growing.
In his subsequent press conference, ECB president Mario Draghi said the central bank will monitor economic and financial market developments very closely due to uncertainties raised by the so-called Brexit.
Investors will also be watching the Federal Reserve’s meeting next week for clues about when the USA central bank might next seek to raise interest rates. But if it highlights the better-than-expected recent economic reports, economists might move up their predictions for when the Fed could next raise interest rates.
France’s CAC 40 index fell 0.1 percent, Britain’s FTSE 100 fell 0.4 percent, and Germany’s DAX index rose 0.1 percent.
GLOBAL MARKETS: Japan’s Nikkei 225 index jumped 1.4 percent on a weaker yen and a Pokemon-powered rally in Nintendo shares.
ENERGY: The price of crude oil fell 43 cents, or 0.9 percent, to $45.51 per barrel.
CURRENCIES: The euro rose slightly to $1.1034 from $1.1015, while the dollar rose to 106.87 yen from 106.01 yen.
Advertisement
METALS: Precious and industrial metals prices ended lower. Gold dated for August delivery added $11.70, or 0.9%, to end at $1,331 per ounce.
