Wall Street finds no clear direction after the roller coaster ride
**After heavy losses on Wall Street, no clear trend emerges on US exchanges. The Dow Jones Index of blue-chip stocks gained slightly, closing 0.2% higher at 39,935 points, after reaching nearly 40,400 points during the trading day. The broader S&P 500 closed 0.5% lower at 5,399, having been up to 5,460 points at one point. The Nasdaq Composite lost 0.9%, closing at 17,181, with around 360 fewer points on the board at its low point.
Despite strong economic growth numbers for the US, the markets closed mostly weaker after a rollercoaster day. The Dow Jones Index of blue-chip stocks closed 0.2% firmer at 39,935 points, having been up nearly 500 points at one point during the trading day. The broader S&P 500 closed 0.5% lower at 5,399, while the technology-focused Nasdaq Composite lost 0.9%, closing at 17,181, with around 360 fewer points on the board at its low point.
The US economy grew by 2.8% on an annualized basis between April and June. Economists polled by Reuters had expected a 2.0% increase. "We are confirmed in our assessment that the US economy is not slipping into a recession," commented economists at Commerzbank. "The Federal Reserve may nonetheless have to start cutting interest rates in the not-too-distant future, as inflation is showing signs of abating." Currency traders are trying to contain inflation with higher interest rates without choking off the economy.
Ford in the red
Long faces were caused once again by losses in technology stocks. Google, Apple, Amazon, and Microsoft continued their downturn. "Favorites on the exchange come and go, and it could now be the case that stocks like Nvidia, Apple, or Alphabet no longer develop better than companies in the second tier," said Konstantin Oldenburger, an analyst at broker CMC Markets. "However, the last word has not been read yet, the uptrend in the Big Techs remains intact, and for some investors, this could now be the next opportunity to enter the ongoing bull market."
The focus was also on individual company earnings. Ford suffered losses, down nearly 5%, due to lower profitability in its electric vehicle business. Expensive quality issues also took a toll.
The US supplier Honeywell also struggled, losing 5.2%. The company's sales in the automation sector fell in the second quarter. Honeywell then lowered its full-year earnings forecast: It is now expected to earn between $10.05 and $10.25 per share, down from the previous forecast of $10.15 to $10.45. The weaker sales were the reason for the downward revision.
Positive quarterly reports were welcomed by IBM, which saw a 4.3% increase in its stock price. Investors were also encouraged to enter the US toy retailer Hasbro after its quarterly earnings report, with the stock price rising 3.5%. "The toy business is still suffering from a post-pandemic hangover, but customers are currently spending more money on digital games like 'Magic: The Gathering' and 'Dungeons & Dragons'," commented Zak Stambor, an analyst at research firm eMarketer.
For further developments on the stock market of today, please read here.
The Dow Jones Index, a measure of blue-chip stocks, showed resilience amidst market volatility, closing 0.2% higher, despite the broader market trend towards weakness. The technology-focused Nasdaq Composite, however, saw a 0.9% decline, reflecting the ongoing challenges faced by tech giants like Google, Apple, Amazon, and Microsoft.
The potential for interest rate cuts by the Federal Reserve due to abating inflation is a topic of interest, as currency traders strive to contain inflation without stifling the economy. This delicate balance is likely to impact stock trading on Wall Street and other US exchanges.
