Stocks fell Thursday, giving up early advances as concerns over the Federal Reserve's future moves on monetary policy offset excitement around the latest batch of corporate earnings.
The Dow Jones Industrial Average lost 0.7 per cent. The S&P 500 slid 0.9 per cent, while the Nasdaq Composite saw the greatest dip of the three at 1 per cent.
The three indexes notched session lows in the final hour of trading. At highs seen earlier in the session, the Dow advanced more than 300 points, while the S&P 500 and Nasdaq Composite were up 0.9 per cent and 1.4 per cent, respectively.
With Wall Street in the middle of earnings season, investors are watching for insights on how companies have fared amid high inflation and how they expect to perform going forward. Investors initially began the day bidding prices higher after positive earnings from consumer bellwethers Walt Disney and PepsiCo.
Roughly two-thirds of S&P has now reported their Q4 earnings for the year, with 70 per cent beating EPS expectations, which is below the one-year and five-year averages. The aggregate earnings reported were only 1.1 per cent above expectations, which is also lower than the one-year and five-year average surprise rate.
Google-parent Alphabet slid more than 5 per cent as investors grew concerned around rising competition in the artificial intelligence space. A 3 per cent decline in Meta also dragged on the technology-heavy Nasdaq.
PepsiCo also advanced modestly — while coming off earlier highs — on the back of fourth-quarter earnings that came in above Wall Street expectations.
In EV news, Volvo Cars said it had “no need” to join Tesla and Ford in cutting prices for its electric models after sales tripled last year. During 2021, about 4 per cent of Volvo Cars’ sales were battery-only models. This rose to 11 per cent during 2022, and was as high as 20 per cent in December. The brand wants half of its sales to be pure battery vehicles by the middle of the decade, with the aim of only selling electric cars by 2030,
Overnight, all S&P500 sectors closed lower. Consumer Discretionary was the best performer, followed by Consumer Staples.
In commodity news, African countries rich in lithium, such as Zimbabwe and Namibia, aim to develop their processing and refining industries to capture a greater share of profits from the increasing global demand for the battery material. This decade, Africa's lithium production is expected to rapidly increase from 40,000 to nearly 497,000 tonnes in 2030, as the countries are determined to retain more value from their resources through processing before export.
Futures
The SPI futures are pointing to a 0.4 per cent fall.
Currency
One Australian dollar at 8:10 AM has strengthened compared to the US dollar yesterday buying 69.33 US cents (Thu: 69.24 US cents).
Commodities
Iron ore futures are pointing to a 0.87 per cent gain. Iron ore is 2.1 per cent higher at US$125.50 tonne.
Gold lost 0.9 per cent. Silver dropped over 2 per cent. Copper added 0.8 per cent and oil fell 1.1 per cent.
Figures around the globe
Across the Atlantic, European markets closed higher. London’s FTSE added 0.3 per cent, Frankfurt gained 0.7 per cent while Paris closed almost 1 per cent higher.
In Asian markets, Tokyo’s Nikkei lost 0.1 per cent, Hong Kong’s Hang Seng gained 1.6 per cent while China’s Shanghai Composite closed 1.2 per cent higher.
Yesterday, the Australian sharemarket closed 0.5 per cent lower at 7,490.
Ex-dividends
BKI Investment (ASX:BKI) is paying 4.2 cents fully franked
Janus Henderson (ASX:JHG) is paying 54.5455 cents unfranked
Dividends payable
Newmark Property REIT (ASX:NPR)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
Disclaimer
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