Wall Street ends lower, frustrated with results and poor performance

The New York Stock Exchange closed lower on Friday due to disappointing corporate results and poor indicators that remind the economy is slowing down.

The Dow Jones fell 0.43% to 31,899.29, the Nasdaq fell 1.87% to 11,834.11 and the broader S&P 500 fell 0.93% to 3,961.63.

“The market is digesting the results of the companies for the week,” explained Angelo Kurkafas of Edward Jones.

For a week, “we had Netflix and Tesla, which were less bad than expected, but then we had frustrations on the technical side,” he added.

Snap (-39.08% to $9.96), the parent company of the social networking site Snapchat, went out of the way, with a loss almost tripling and a dismal speech about advertising.

The little ghost firm has taken other social media with it, from Meta (-7.59%) to Pinterest (-13.51%), through Donald Trump’s future listed social media platform Truth Social (-3.04%).

In addition, companies also affected by advertising, such as Alphabet (-5.81%) or digital marketing platform The Trade Desk (-7.30%).

Although it also fell short of analysts’ forecasts, Twitter remained on the sidelines (+0.81% to $39.84). The market opted to keep active user growth, which was seen as encouraging given the context and the Elon Musk controversy.

So far, according to Angelo Kurkafas, “even if the results were not overwhelming, they were good enough” to support the indexes.

For Nick Rees of Merk Investments, Snap’s results were a “reminder” of the challenges facing the tech sector, with rising costs of credit, persistent supply issues and slowing economic growth.

As such, “anxiety about next week’s tech results” with Amazon, Apple, Microsoft, and Meta is “pressing the market.”

Few other setbacks include steel maker Cleveland-Cliffs (-8.87%), whose earnings came in below forecasts, or phone operator Verizon (-6.74%), which revised down its targets.

In an unfavorable context for technology and growth stocks, investors favored so-called defensive stocks that are less sensitive to the economic situation, whether McDonald’s (+0.21%), Johnson & Johnson (+0.47%) or Procter & Gamble (+0 .47%). 1.60%).

The market was also “macro-weighted”, according to Nick Rees, mainly on a number of PMI activity indices, in particular their US composite version. The latter came out at its lowest level since June 2020.

“Recession talk is back,” the analyst explained.

As a result, operators are seeing the US Central Bank (Fed) pause its rate hike cycle in December, after a 0.75 point hike in July, then two half-point hikes each in September and November.

“We are seeing more and more signals that the peak of inflation is behind us,” said Angelo Kurkafas.

This sentiment explains Friday’s sharp contraction in bond yields as investors believe the Fed is less aggressive than expected in tightening monetary policy.

The yield on 10-year government bonds fell to 2.75%, the lowest level in almost two months, from 2.87% a day earlier.

In addition to the results and the Fed meeting, Wall Street will follow next week the first estimate of the US gross domestic product (GDP), which may show a contraction in the second quarter.

Technically, the decline would send the United States into recession after an initial decline in the first quarter.

In the rankings, toy maker Mattel fell (-7.12% to $22.45) despite better-than-expected results. The doll business has experienced a downturn, especially Barbie.

Shares of American Express were in demand (+1.88% to $153.01) after posting better-than-expected results, helped by a recovery in tourism as well as business travel. The credit card specialist also raised his growth targets for the full year.

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