Wall St slips as weak earnings hit technology & travel stocks
Europe shares mixed after Asian decline
NEW YORK, Aug 9, (AP): US stocks fell in morning trading on Wall Street Tuesday as disappointing earnings reports weighed on technology and travel companies and investors await the latest updates on inflation.
The S&P 500 fell 0.4% as of 10:19 a.m. Eastern. The Dow Jones Industrial Average fell 17 points, or 0.1%, to 32,813 and the Nasdaq fell 1.3%.
Technology stocks fell broadly and weighed down the broader market. Chipmaker Micron Technology fell 4.1% after warning investors that revenue could fall short of forecasts because of weakening demand. That warning hit other chipmakers hard, with Nvidia shedding 3.6%.
Norwegian Cruise Line plunged 10.1% after reporting disappointing financial results and giving investors a weak revenue forecast. The weak results weighed down travel-related stocks. Expedia fell 1.9% and American Airlines fell 3.1%.
Energy stocks rose along with oil prices. U.S. crude oil prices rose 1.1% and Exxon Mobil rose 2.9%.
Progress
Audience rating company Nielsen surged 21% after it announced progress on a deal to be acquired by private equity firms.
Bond yields rose. The yield on the 10-year Treasury rose to 2.81% from 2.75% late Monday.
Investors have been closely watching the latest round of corporate earnings and the latest economic for more clues on how inflation is hurting consumers and businesses. The earnings season is beginning to wind down and Disney, Wendy’s and Wynn Resorts will be reporting quarterly results this week.
The U.S. Labor Department will release its July report for consumer prices Wednesday, followed by its producer prices report on Thursday. Investors and economists will look for any signs that the Federal Reserve’s aggressive rate hikes the past few months have helped to bring four-decade-high inflation under control.
The Fed has raised rates four times this year in an effort to hit the brakes on the economy and cool the hottest inflation in four decades. But, Wall Street is worried that the central bank could slam the brakes too hard and skid the economy into a recession. Last week’s strong July jobs report has most economists predicting the Fed will again raise short-term interest rates by as much as another three-quarters of a point at its September meeting.
Fighting in the Ukraine and attacks on Europe’s biggest nuclear plant are other factors hanging over markets.
Moscow and Kyiv have accused each other of shelling a nuclear power plant in Russia-occupied southeastern Ukraine, attacks that have fueled international concerns. The Zaporizhzhia nuclear power plant has six nuclear reactors, and the fighting around it has raised the danger of
a nuclear accident.
Europe
France’s CAC 40 fell 0.5%, while Germany’s DAX tumbled 1.2%. Britain’s FTSE 100 was essentially unchanged.
Asia
In Asian trading, Japan’s benchmark Nikkei 225 dipped nearly 0.9% to finish at 27,999.96.
Japan’s technology investor SoftBank Group Corp. dropped more than 7%. On Monday it reported a record quarterly loss of $23 billion. A global nose-dive of technology-related issues, such as Chinese e-commerce giant Alibaba, has weighed on its sprawling portfolio of investments.
Australia’s S&P/ASX 200 edged up 0.1% to 7,029.80. South Korea’s Kospi edged 0.4% higher to 2,503.46.
Hong Kong’s Hang Seng erased earlier gains, falling 0.2% to 20,003.44, while the Shanghai Composite edged up 0.3% to 3,247.43.
Analysts monitoring Asian markets said regional tensions remain a risk because of the flareup between China and Taiwan after the recent visit of U.S. House Speak Nancy Pelosi to Taiwan.
China has said it’s extending threatening military exercises
surrounding Taiwan, disrupting shipping and air traffic and raising up a notch worries about trade.
“It is worth keeping track of the geopolitical landscape as any major developments on the China/Taiwan front could impact overall risk demand. China confirmed it would extend military drills around Taiwan, and the military will conduct ‘regular’ exercises on the eastern side of the median line of the Taiwan Strait,” said Anderson Alves at ActivTrades.
Also of concern are the rising cases of COVID-19 in China, Japan and some other Asian nations, and their potential impact on supply chains that are a lifeline to some of the region’s biggest manufacturers.
Oil
In energy trading, benchmark U.S. crude rose $1.09 to $91.85 a barrel in electronic trading on the New York Mercantile Exchange. It added $1.89 to $90.76 a barrel on Monday.
Brent crude, the international standard for pricing crude, gained $1.25 to $97.90 a barrel.
Currencies
In currency trading, the U.S. dollar inched up to 135.02 Japanese yen from 134.98 yen. The euro cost $1.0238, up slightly from $1.0193.