NEW YORK (dpa-AFX) – Company figures that were received rather negatively and weak economic data weighed on the mood on the US stock markets on Thursday. In addition, the next interest rate decision by the US Federal Reserve is approaching with the seasonally weak month of May.
After a weak start, the leading index Dow Jones Industrial (Dow Jones 30 Industrial) was unable to maintain the gains it had made in the meantime. In the end, however, it held up quite well with a minus of 0.33 percent to 33,786.62 points. The other indices lost a little more: The market-wide S&P 500 fell by 0.60 percent to 4129.79 points and the technology-heavy NASDAQ 100 lost 0.78 percent to 12,985.98 points.
While the number of weekly initial jobless claims rose slightly more than expected, the business climate in the US region of Philadelphia deteriorated significantly in April. Analysts, on the other hand, had expected a moderate improvement in sentiment. In addition, both leading economic indicators and sales of existing homes fell more sharply in March than forecast. Even before that, the economic report published by the US government (“Beige Book”) on Wednesday had fueled concerns about an economic slowdown, noted analyst Michael Hewson from broker CMC Markets UK.
On the company side, the electric car manufacturer Tesla in particular suffered from disappointing business figures on Thursday: In the end, the shares lost almost ten percent as the bottom of the Nasdaq 100. Already on Wednesday, the titles had fallen after the announcement of further price cuts. In addition to the declining profitability in the first quarter due to an aggressive pricing policy, the surprisingly low inflow of cash was also criticized. “The focus of the quarterly report has always been whether Tesla can maintain the impressively high margins,” wrote analyst Josh Gilbert of the investment house eToro. However, the gross margin has now fallen to its lowest level since 2020 and is also significantly weaker than the market consensus.
In the Dow, American Express was one of the biggest losers at minus one percent. The credit card company’s earnings per share fell short of expectations at the start of the year. The income, which was slightly higher than expected, and the confirmed annual targets could not compensate for this.
At AT&T, high inventory and capital expenditures, which severely impacted cash flow, outweighed higher-than-expected increases in mobile bills and a surprising number of new contract customers. The share certificates of the telecom group lost 10.4 percent, which meant the largest daily loss since the turn of the millennium. They also dragged shares in Dow competitor Verizon, which lost 3.7 percent at the end of the index.
Philip Morris shares fell 4.7 percent after the recent recovery. A surprisingly high earnings per share of the tobacco company with moderately disappointing sales were not enough for further purchases. Investors were also not convinced that CEO Jacek Olczak spoke of an encouraging start to the year and confirmed the annual targets.
IBM’s shares developed better: They ultimately managed a minimal plus after the computer group had positively surprised with its significant increase in profits in the first quarter.
The euro temporarily benefited from the weak US economic data, but moved away from the $1.10 mark in New York trading at $1.0967. The European Central Bank (ECB) had set the reference rate at 1.0944 (Wednesday: 1.0933) dollars and the dollar thus cost 0.9137 (0.9147) euros.
US government bonds also got tailwind from the data: The futures contract for ten-year bonds (T-Note Future) recently rose by 0.47 percent to 114.72 points. In return, the yield on ten-year government bonds fell to 3.53 percent./gl/he
— By Gerold Löhle, dpa-AFX —