US-stock exchanges hardly move from the spot
Political developments take a backseat at Wall Street as earnings season takes center stage. Spotify and Coca-Cola impress with strong numbers and surge significantly. However, UPS experiences a decline.
The Wall Street rollercoaster has come to a halt for now. The Dow Jones Industrial Average of blue-chip stocks closed 0.1% lower on Tuesday at 40,358 points. The tech-heavy Nasdaq remained stagnant at 17,997 members. The broad S&P 500 lost 0.2% to 5,555 levels. "Political turbulence of the past few days took a backseat today, and investors focused on corporate news," said Konstantin Oldenburger, an analyst at broker CMC Markets.
Disappointments and positive surprises balanced each other out initially. However, Bob Savage, Chief Strategist at Bank of New York Mellon, warned, "The market volatility shows that disappointments have become more dangerous than in the first quarter."
Investors were attracted to Spotify, which saw a nearly 12% increase in share price. The music streaming service impressed investors with a surprisingly strong earnings growth due to lower marketing expenses.
Coca-Cola also caught the attention of investors. The US beverage giant raised its annual targets after reporting growth in the second quarter. The company attributed the positive development to increasing demand, particularly on international markets, for its premium limonades, energy drinks, and sodas.
However, shares of UPS took a hit, losing around 12% of their value. The US parcel delivery company faced the consequences of weak demand and relatively high labor costs in the US.
Comcast also came under pressure, losing 2.6%. The entertainment conglomerate's earnings were dented by revenue declines in film and theme parks, resulting in a nearly 3% decrease in revenue to $29.69 billion.
Alphabet and Tesla released their earnings reports after market close. Tesla reported a significant earnings decline, causing the stock to drop by 2.6%. Alphabet, on the other hand, reported surprisingly strong quarterly results due to robust cloud business and advertising revenues.
ING Bank experts advised caution during earnings season: "Surveys among investors suggest that corporate earnings have more potential to influence the next rally on the stock markets than the next steps of the US Federal Reserve." The earnings of Google's parent company and the electric car manufacturer were particularly significant. The seven most important technology companies had lost around 8% in this month alone.
Market participants are keeping a close eye on further developments in US politics. "The markets seem to be in a holding pattern today, after digesting the news from the weekend about Biden's exit from the presidential race," said Michael Brown, Strategist at Pepperstone broker in London. Investors will primarily focus on whether the polls show a closer race between Biden and Trump than when Biden was the Democratic candidate.
Further developments on today's stock market events can be read here.
The stock prices of tech giants like Alphabet saw a boost following their robust quarterly results, while Tesla experienced a dip due to an earnings decline. During the earnings season, the Dow Jones, Nasdaq, and S&P 500 showed varied performances, influenced by a mix of positive surprises and disappointments. The performance of these indices reflects the overall health of the US economy, which is closely monitored by stock traders.
