NEW YORK (dpa-AFX) – At the end of a strong stock market week, investors took profits on the US stock exchanges on Friday. After a particularly strong recovery, this was particularly true for the technology sector, as the NASDAQ 100 showed with a setback of 1.77 percent to 12,396.47 points. A price drop at the app provider Snap caused a bad mood among internet stocks there.
The US standard stocks, which have risen less recently, have consequently come under less pressure: the Dow Jones Industrial (Dow Jones 30 Industrial) fell by 0.43 percent to 31,899.29 points. The broad S&P 500 lost 0.93 percent to 3961.63 points.
All three New York indices had reached their highest levels in six weeks in a multi-day recovery rally. Even though the Nasdaq 100 fell more sharply on Friday, the technology-heavy index posted the best weekly result with a plus of 3.5 percent. The Dow was up almost 2 percent for the week.
Investors have had a lot of news from the areas of geo and monetary policy and from the companies had to digest, analyst Craig Erlam from broker Oanda summed up. In view of the high inflation, central banks see the only way out in aggressive tightening of monetary policy. Although the reporting season has not yet progressed that far, the trend was that many figures “were not as bad as feared”. That brings relief, but is not enough for a sustainable recovery.
The fear of inflationary damage, rapidly rising interest rates and a recession is difficult to shake off, according to Brsians. Worries were also sustained by disappointing economic data. In the USA, the mood in the service sector had surprisingly and also very clearly deteriorated in July, as the purchasing managers’ index of the market researcher S&P Global showed.
At the end of the week, investors’ attention was primarily focused on the photo app provider Snap. The market spoke of “shocking” numbers, with shares plummeting 39 percent. Snap posted its slowest growth since going public just over five years ago and extended quarterly losses. As a result, there were a number of analyst downgrades. JPMorgan analyst Douglas Anmuth jettisoned his optimism on the stock by downgrading his rating to underweight.
In view of the prospects for advertising, Anmuth was skeptical about the entire online industry. TikTok was not explicitly mentioned by Snap, but the rise of this platform is likely to have a major impact. He therefore expects consensus estimates to fall for many sectors. The papers of the Google and Facebook parent companies Alphabet (Alphabet A (ex Google)) and Meta (Meta Platforms (ex Facebook)) lost up to 7.6 percent. Those of the Snap competitor Pinterest even dropped by 13.5 percent.
In general, the reporting season for companies made rather negative headlines this time. In the telecom sector, the turbulence continued after AT&T’s cash flow outlook had been lowered the day before, because Verizon was also disappointing with its results. With a discount of 6.7 percent, the shares fell to their lowest level since 2017. Verizon again revised its full-year targets downward.
Investors from memory manufacturers also suffered heavy losses. After missed expectations and a weak outlook, Seagate Technology shares fell 8.1 percent, dragging competitor Western Digital’s shares down 6.4 percent. This was followed by the industry chip supplier Micron (Micron Technology) with a discount of 3.7 percent.
A positive ray of hope were the shares of American Express at the top of the Dow with a price increase of almost two percent. The financial service provider, which is primarily known for its credit cards, exceeded analysts’ expectations despite a drop in earnings and raised its annual target for sales growth.
The euro hovered around the $1.02 mark. Most recently, it was listed just above it at $1.0208. The European Central Bank had set the reference rate at 1.0190 (Thursday: 1.0199) dollars.
US government bonds rose in contrast to the stock market. The futures contract for ten-year Treasuries (T-Note Future) rose by 0.92 percent to 120 points. In return, the yield on ten-year government bonds fell to 2.77 percent
— By Timo Hausdorf, dpa-AFX —